India may not need to import any wheat in 2008 - Reuters
The Indian government has begun buying domestic wheat two weeks earlier than usual and hopes to bag more than 15 million tonnes in 2008, a top government official said, a target which if met could eliminate the need for major imports, reports Reuters.
The world's second-biggest grower needs around 12 million tonnes of the grain every year to feed millions of poor at subsidised rates and check any spurt in local prices.
But in 2006, a poor crop and greater buying by private firms ate into reserve stocks, forcing the government to tap world markets for 5.5 million tonnes of the grain, the first imports in six years.
Overseas buys last year fell to 1.8 million tonnes but increasingly costly purchases helped fuel a rise in global prices which have more than doubled in the past year. This year, New Delhi is paying farmers substantially more for their grain to boost purchases.
"The fact that wheat procurement has started two weeks early indicates that the wheat crop is good, there is surplus and private companies are not buying," Alok Sinha, chairman and managing director of the Food Corp of India (FCI), told Reutersin an interview on Wednesday.
The FCI, which acts as a custodian for foodgrains, usually buys wheat from April 1, but harvests have begun early especially in the western state of Gujarat and central state of Madhya Pradesh and the grain has already reached wholesale markets.
Sinha's confidence is shared by others and stems from a government decision to raise the price it pays local farmers for wheat to 1,000 rupees per 100 kg, up from 850 rupees last year.
In each of the last two years, private firms stepped in with better offers, cutting into Food Corp's purchases.
"I am quite optimistic. It looks like the FCI will be able to buy between 15 to 17 million tonnes of wheat this year, much higher than last two years," said M.K. Dattaraj, president ofthe Roller Flour Mills Federation of India.
The Farm Ministry last month said India would produce 74.81million tonnes of wheat in 2008, down one million tonnes from last year. Government officials have since said output would beat expectations as weather conditions have been favourable.
The world's second-biggest grower needs around 12 million tonnes of the grain every year to feed millions of poor at subsidised rates and check any spurt in local prices.
But in 2006, a poor crop and greater buying by private firms ate into reserve stocks, forcing the government to tap world markets for 5.5 million tonnes of the grain, the first imports in six years.
Overseas buys last year fell to 1.8 million tonnes but increasingly costly purchases helped fuel a rise in global prices which have more than doubled in the past year. This year, New Delhi is paying farmers substantially more for their grain to boost purchases.
"The fact that wheat procurement has started two weeks early indicates that the wheat crop is good, there is surplus and private companies are not buying," Alok Sinha, chairman and managing director of the Food Corp of India (FCI), told Reutersin an interview on Wednesday.
The FCI, which acts as a custodian for foodgrains, usually buys wheat from April 1, but harvests have begun early especially in the western state of Gujarat and central state of Madhya Pradesh and the grain has already reached wholesale markets.
Sinha's confidence is shared by others and stems from a government decision to raise the price it pays local farmers for wheat to 1,000 rupees per 100 kg, up from 850 rupees last year.
In each of the last two years, private firms stepped in with better offers, cutting into Food Corp's purchases.
"I am quite optimistic. It looks like the FCI will be able to buy between 15 to 17 million tonnes of wheat this year, much higher than last two years," said M.K. Dattaraj, president ofthe Roller Flour Mills Federation of India.
The Farm Ministry last month said India would produce 74.81million tonnes of wheat in 2008, down one million tonnes from last year. Government officials have since said output would beat expectations as weather conditions have been favourable.
