Govt may allow mill s to import wheat, says Pawar

New Delhi, April 28 | Updated: Apr 29 2006, 05:30am hrs
The government is seriously considering to allow private flour mills and other wheat users, to import the grain under the open general licence scheme, agriculture minister Sharad Pawar said on Friday.

Mr Pawar said private sector imports could attract concessional duty, but did not say whether they would be duty-free as is the case with state-run trading firms. Last week, the agriculture minister said the country would import 3 million tonne of wheat in addition to 5,00,000 tonne already contracted from Australian exporter AWB Ltd.

The 3.5 million tonne wheat imports, we have decided upon are sufficient for the public distribution system (PDS). If there is a shortfall, we will import more, Mr Pawar said on Friday. State-run and private traders were expected to play a role in bringing the grain to the country.

If the agriculture ministers suggestion is granted, only actual users were likely to be allowed to import wheat at concessional duties to ensure that the supplies do not flow to traders, playing the market for quick profits.

Government agencies have been trying to replenish depleted stocks by buying newly harvested wheat, but this has met with only limited success with the farmers holding back their produce in anticipation of prices rise later in the year. The crop had dwindled last year to 70-72 million tonne because of bad weather, after experts had forecast a record haul of 76 million tonne.

We expect 72-73 million tonne of wheat production this year. The market situation is not that bad, Mr Pawar said on Friday, adding, the prices had been rising in the spot market in response to lower procurement.

An agriculture ministry official told Reuters that the government agencies had by early this week procured 8.2 million tonne of wheat compared to 11.7 million tonne at the same time a year ago. The countrys annual demand is 70-72 million tonne.