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Millers bet against wheat imports in ’07

Millers bet against wheat imports in ’07
PTI
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First Published: Sun, Mar 25 2007. 10 14 PM IST
Updated: Sun, Mar 25 2007. 10 14 PM IST
New Delhi: Despite the government’s instructions to the State Trading Corp. (STC) to gear up for imports of three million tonnes (mt) wheat this year, if required, flour millers are hopeful that the country may not require any imports of the foodgrain due to high procurement prices and likely rise in production.
“The government may not have to import wheat this year as the procurement will exceed the target (151 lakh tonnes) due to the timely announcement of a bonus of Rs100 per quintal and other factors,” said Veena Sharma, secretary of the Roller Flour Millers’ Federation of India.
On production estimates, Sharma said wheat production is likely to cross 73mt this year against 69.35mt in the 2005-06 season.
This year, she added, the private traders would not be left with much of a margin after the bonus announcement, which has taken the procurement price to Rs850 per quintal in the 2006-07 rabi season, against Rs700 per quintal last year.
The country had to import 55 lakh tonnes of wheat last year to meet the buffer stock requirement as the government was able to procure only 92 lakh tonnes against the targeted 162 lakh tonnes, mainly due to aggressive buying by the private sector.
Sharma said the profit margins for the private trade would not be much considering the need to outbid the government price, besides the storage cost incurred by the firms, which was about Rs25 per quintal per month.
“The lesser margin will restrict private traders from buying much quantity of wheat this year,” she said, adding that flour millers would not purchase in large quantities in view of the anticipated better availability throughout the year.
Meanwhile, the government’s decision to seek declarations from traders buying more than 50,000 tonnes of wheat would help it meet the procurement target, Sharma added. Market sources, however, said the private traders have agreed not to buy wheat in large quantities for the first few weeks in order to enable the government to undertake procurement for ration shops and other social welfare schemes.
The government’s decision to ask STC to gear up for imports is only seen as a message to private traders.
“I doubt whether the government is serious about imports. This is a message for private traders not to come in the way of government procurement,” an official said.
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First Published: Sun, Mar 25 2007. 10 14 PM IST
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