April 27, 2006


India to issue new tender for wheat soon



India would issue a new wheat import tender soon to supplement low government stocks and control rising prices, a food ministry official said on Wednesday (Apr 25).


The official said that the tender was likely to be issued within a fortnight.


Earlier this month, Farm Minister Sharad Pawar said India would import 3 million tonnes of wheat in addition to 500,000 tonnes already contracted with Australian exporter AWB Ltd.


The first consignment of 50,085 tonnes of wheat from Australia arrived in India on Tuesday (Apr 24).


Government agencies have been trying to replenish dangerously low reserve stocks since the first week of April by buying newly harvested wheat in the main northern growing regions.


But the effort has been thwarted by farmers holding back in hopes of getting higher prices. The government, whose purchasing started Apr 1, has only managed to buy half the 16 million tonnes of wheat targeted. The procurement exercise is scheduled to last until the end of May.


Traders estimate the government's wheat stock position at about only 1 to 2 million tonnes, way under the normal levels of 16 to 18 million tonnes.


D.P. Singh, president of the All India Grain Exporters Association, said the wheat was likely to be imported by a combination of state-run and private traders.


Prices would stablise once the private traders enter the picture, he said.


The first wheat shipment was contracted entirely by the State Trading Corp.


A Mumbai-based analyst said government wheat procurement was likely to fall 4 million tonnes short of the targeted 16 million tonnes. However, some of the wheat imports might be staggered to ensure steady supplies through the year.


Plans for a contingency food planning has been put off as the weather office forecast this week that the monsoon would be just below normal.


The wheat crop last year fell to 72 million tonnes because of bad weather, lower than the expected 76 million tonnes.


Wheat output this year may fall below the government's forecast of 73 million tonnes because of unusually hot weather in February.

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