India may buy 4-5 mn tonnes wheat to build stocks

India may buy 4-5 mn tonnes wheat to build stocks
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First Published: Sat, May 12 2007. 04 10 PM IST
Updated: Sat, May 12 2007. 04 10 PM IST
By Reuters
New Delhi: India might import four to five million tonne of wheat this year to build stocks to meet any sudden spurt in demand, farm minister Sharad Pawar said 12 May.
The country is looking to import wheat for the second year running with government purchases of domestic grain likely to fall short of its target figure. The State Trading Corp has already tendered to import one million tonne of wheat. The bidding deadline for the tender closes on 21 May.
“We may import four to five million tonne of wheat this year to build stocks for emergencies,” Pawar said on the sidelines of a meeting on farm research. “We have enough for this year but we want to build stocks.”
Pawar added as on 1 April that government had stocks of 4.5 million tonne of wheat and since then state agencies have purchased 9.2 million tonne of wheat from farmers.
The government needs 12 million tonne of wheat annually for the public distribution system and welfare schemes for the poor. The Food Corp. of India buys wheat from farmers on behalf of the government. It hopes to buy 12-13 million tonne by 1 June. It had hoped to buy 15 million tonne.
Lower purchases of the grain in 2006 forced India to go in for expensive imports totalling 5.5 million tonne. Pawar mentioned it is difficult to say how much wheat would be procured this year.
“We are having discussions with state governments on low procurement.” India has one wheat crop a year, mostly in its northern states, and output has been stagnating around 70 million tonne annually while consumption has been growing.
The farm ministry has forecast the wheat crop will rise to 73.3 million tonne this year from 69.4 million in 2006.
Sugar Blues
Referring to sugar, Pawar said the government has already given incentives to help the industry facing problems of high stocks, poor exports and low prices.
“If further interventions are needed we will see,” he said. Trade officials say mills are facing a crisis with domestic sugar prices languishing below production costs and a bumper crop likely to push them lower.
The government in August last year banned exports to curb rising prices. Sugar firms resumed exports in January but lower world prices have made exports unattractive. To boost exports, the government has offered mills transport and freight subsidies.
It has also offered to build a sugar buffer of 2 million tonne. But mills want a buffer of at least 4 million tonne to help them recover production costs and make timely payments to cane farmers.
India, the world’s second-largest sugar producer, is expected to produce a record 26 million tonne of sugar in the year to September, against annual consumption of 19-20 million tonne.
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First Published: Sat, May 12 2007. 04 10 PM IST