India to issue wheat import tender shortly

India to issue wheat import tender shortly
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First Published: Mon, Aug 20 2007. 11 39 AM IST
Updated: Mon, Aug 20 2007. 05 20 PM IST
New Delhi: India plans to float a new wheat import tender shortly to shore up stocks and to keep a lid on prices, but is yet to decide on the quantity, a senior government official said on Monday.
The country bought 5.5 million tonnes of wheat in 2006, the first imports in six years, and has already contracted 511,000 tonnes this year.
“We will issue a tender to import wheat soon but we are exploring various options, including shipments in containers,” the official, who did not want to be identified, told reporters.
He said containers would lower costs than vessels.
“We would have issued a tender before August, but high international costs of freight have been a deterrent,” the official said.
Farm Minister Sharad Pawar has said the government would import 3-5 million tonnes of the grain in 2007 despite high global prices.
Wheat prices on the Chicago Board of Trade touched fresh 11-year highs above $7 per bushel last week due to strong export demand and tight world supplies.
“There is a need to import because of needs of food security which we cannot compromise,” Pawar told parliament on Monday. “We do not get any happiness from paying high prices.”
The government has bought about 11 million tonnes of wheat from local farmers in 2007, up from around 9 million tonnes last year. It buys grains from farmers at a fixed price to meet any shortage and to keep prices under check.
“Despite good output, total procurement this year is 11.1 million tonnes against a requirement of 15 million tonnes for stocks and welfare programmes,” Pawar said.
Wheat output in India, the world’s second-biggest producer, is likely to be 74.89 million tonnes in 2007, up from 69.48 million tonnes last year.
Trade officials said the harvest was expected to be the best since 2000, when India produced a record 76.37 million tonnes of the grain.
The government has been concerned over high food prices that have been contributing to inflation pressures. Rice and wheat are the staple diet for the country’s more than one billion people.
Industry officials said this month the food ministry had proposed scrapping a 30 percent customs duty on wheat flour to keep a lid on prices during upcoming religious festivities.
But Junior Food Minister Akhilesh Prasad Singh told parliament on Monday that government had no such plans.
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First Published: Mon, Aug 20 2007. 11 39 AM IST
More Topics: India | wheat | tender | import | Economy and Politics |