August 29, 2006

India to import 2 million tonnes of duty-free wheat

India's government has allowed import of an additional 2 million tonnes of wheat duty free to meet shortages in its production system this year.

The imports would be made by state-run Food Corporation of India by Feb 28, 2007, the Directorate General of Foreign Trade (DGFT) said in a notice.

The 2 million tonnes of wheat is in addition to the 3.8 million tonnes the State Trading Corporation imported at zero-duty. State-owned firms MMTC Ltd and PEC Ltd are also importing 40,000 tonnes of wheat each for private traders at five percent customs duty.

India had targeted to secure 16 million tonnes of wheat from its own farmers by Jul 1 this year to maintain buffer stock for its PDS, but has managed to buy only 9.2 million tonnes so far.

Since February, STC has floated four tenders for import of 3.9 million tonnes of wheat. Most of the wheat were contracted from global suppliers such as Swiss firm Agrico Trade and Australia's AWB.

The government had revised domestic wheat production during 2005-06 at 69 million tonnes, lower than the average of 71-74 million tonnes in previous years.