Dubai: India, the world’s largest wheat consumer after China, plans to increase purchases from farmers to build stockpiles and lower imports.
The government may buy as much as 15 million tonnes (mt), up 35% from a year earlier, food secretary T. Nanda Kumar said on Tuesday.
Higher purchases would reduce the need to buy wheat overseas at prices that had almost doubled in the past year, reaching a record $10.095 (Rs398) a bushel on 17 December. It may also take the pressure off global supplies which, the US government forecasts, will drop to 110.9mt by 31 May, the lowest in three decades.
“If we procure this much, we may be comfortable,” Kumar said, adding India’s wheat production may match last year’s 74.9mt in the March-April harvest because of favourable weather and increased planting in Punjab and Haryana, the biggest producing states.
The government may still import wheat to enhance its reserves, Kumar said. India has since July imported 1.64mt to build stocks.
Purchases in the year ending June may drop to 2mt, less than one-third made in the previous year, the US department of agriculture said in a report on 11 January.
“We may not need to but importing is an option that will be kept open,” he said, adding that the government needs 1mt a month to distribute to the poor.
Because of recent imports, stocks at state warehouses may total 5mt by 1 April, more than the 4mt needed for emergencies.
Wheat for March delivery gained as much as 1.1% to $9.84 a bushel in after-hours electronic trading on the Chicago Board of Trade. It traded at $9.77 in Singapore.