India plans to import 1mt wheat by March

India plans to import 1mt wheat by March

New Delhi: Three Indian state-run companies are likely to import up to 1 million tonnes (mt) of wheat soon, a senior government source said on Tuesday, but will probably have to pay at least $400 (Rs15,760) per tonne for the commodity.

The first firm to buy is expected to be MMTC India Ltd, followed by PEC Ltd and State Trading Corp. of India Ltd, but the source did not say when tenders would be issued.

The total quantity to be imported is likely to be split equally between the three firms. Shipments are expected to be firmed up between December and March.

India, the world’s second biggest wheat producer, has tied up import contracts for 1.3mt of the grain this year, after buying 5.5mt in 2006 as prices flared due to a poor crop. Those were the first overseas buys in six years.

“The prices of the imported wheat are definitely going to be $400-$450 per tonne," said a senior Mumbai-based official at an international commodities firm. The last imports contracted in September were at a weighted average price of $389.45 per tonne.

Earlier this month, the government raised the price it would pay local wheat farmers next year to Rs1,000 per 100 kg from Rs850 to encourage planting.

Traders said sowing prospects for the domestic crop to be harvested in March or April appeared to be good because of the decision to raise prices and good soil moisture. India’s wheat output is expected to be around 74.9mt this year, the government has estimated—up from 69.3mt last year. To feed the country’s more than one billion people, India needs about 73mt of wheat.

The government’s main procurement agency, Food Corporation of India, had stocks of 10.1mt on 1 October, against a target of 11mt. This quantity is mainly used for the government’s welfare programmes.

India grows only one wheat crop. The grain is sown in the winter months of November and December.