The government may import wheat from Russia and would soon start talks over this. The matter was discussed recently at the meeting of the empowered group of ministers. The GOM has also decided to send a delegation comprising officials from the departments of food and public distribution, ministry of commerce, STC and MMTC to Russia to look into the proposal.
If the Russian government gives its nod to the proposal, other modalities, including prices, would be worked out in consultation with the finance ministry.
The move is significant as the government scrapped the wheat import tender of the State Trading Corporation (STC) on Monday on account of high prices. STC had floated the tender on December 10 for import of 350,000 tonne wheat. Cargill, Glencore and Toepfer together offered to sell 315,000 tonne wheat at the price ranging between $459 and $579 a tonne, which is significantly higher than prevailing domestic prices.
In order to build a decent buffer stock, in October the government authorised public sector units MMTC Ltd, PEC and STC to import up to 1 mt wheat, with the amount equally split between the three.
Last month, MMTC bought 342,000 tonne wheat at a weighted average price of $400 per tonne.
At the present level of offtake, wheat stock in the central pool is likely to be at 4.5 mt, well above the buffer norm of 4 mt as on April 1, 2008.
The Left parties, whose support is crucial for the UPA government?s survival at the Centre, has been opposing wheat imports, at rates significantly higher than domestic rates. The overall production of wheat this year is expected to about 75 mt as against production of 74.89 mt in 2006-07.