August 21, 2023
India in talks with Russia to import wheat at discount, sources claim
India is in talks with Russia to import wheat at a discount in a rare move to boost supplies and curb food inflation ahead of state and national elections next year, according to four sources.
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The imports would allow New Delhi to intervene more effectively in the market to drive down wheat prices that stoked inflation to a 15-month high in July.
"The government is exploring the possibility of imports through private trade and government-to-government deals. The decision will be made cautiously," one of the sources told Reuters, when asked about wheat imports from Russia.
India has not imported wheat through diplomatic deals in years. The last time India imported a significant amount of wheat was in 2017 when private traders shipped in 5.3 million tonnes.
The government's plan to import Russian wheat is one of the supply-side measures being considered to bring down prices of key commodities like fuel, cereals and pulse along with an extension of rural schemes to ease the impact of inflation on the poor, two of the sources with knowledge of the matter said.
Although India needs only three million tonnes to four million tonnes of wheat to plug the shortfall, New Delhi might consider importing eight million tonnes to nine million tonnes of wheat from Russia to have a far bigger impact on prices, another source said.
"India can easily secure a discount of $25 to $40 per tonne from Russia. This will ensure that the landed cost of wheat remains significantly below local prices," said a dealer based in Mumbai with a global trade house.
Wholesale wheat prices in India surged around 10% over two months to a seven-month high in August on limited supplies.
Wheat stocks at government warehouses were at 28.3 million tonnes on August 1, 20% below the 10-year average.
Last year, India banned wheat exports due to lower output, and this year's crop is also expected to be at least 10% lower than the government's estimate.
- The Times of India
