India: Set to become world's leading wheat importer, US planning a share of the pie? Print E-mail

Friday September 1 2006

MARKETS & COMMODITIES

India set to be largest wheat importer 

US wants a share of the pie as the country imports 8.5 mt this year

Ashok B. Sharma 

A GRAIN OF TRUTH
• Private wheat imports currently attract a duty of 5%
• In June, duty was cut from 50% to 5% to curb spiralling prices
• The government is importing 5.5 mt of the grain at zero duty
• Egypt would be the rank second largest importer with a possible import of 7.2 mt
• Farmers estimate output at 73 mt against a demand of 60 mt

NEW DELHI, AUG 31: 
The country is likely to emerge as the largest wheat importer, this year, if the government’s import plans work out as per schedule.

India, which was the seventh largest exporter of wheat a few years ago, will import more than 8.5 million tonne (mt) wheat, this year.
 
Since not a single grain of wheat from US could be imported so far despite relaxed quality norms, US ambassador in India David Mulford is likely to meet agriculture minister Sharad Pawar in this connection, sources said.
 
The government has planned to import 5.5 mt against zero duty on its own account. It has allowed coporates and MNCs to import 3 mt wheat against a reduced duty of 5%. Thus, under the liberalised import plan, a total of 8.5 mt wheat are likely to be imported in 2006-07.
 
This would make India the largest importer of wheat in the current year. According to an USDA report, Egypt would rank second with a possible import of 7.2 mt, followed by Brazil with a likely import of 6.8 mt So far the government, through State Trading Corporation of India, has contracted an import of 3.8 mt wheat. Fresh tenders are floated for import of another 1.67 mt wheat. As against the target for import of 3 mt wheat, the private sector could so far import only 500,000 tonne wheat.
 
The private sector, particularly the corporates and MNCs, has demanded that the import duty be further reduced from 5% to zero to enable it to import adequate quantity of wheat. The private players have pointed out that the government is importing wheat on its own account against zero duty. The government is actively considering this demand made by the corporates and MNCs.
 
A leading farmers’ organisation Bharat Krishak Samaj had riticised the government for importing wheat and liberalising its imports when year’s production was to the tune of 73 mt against a consumption demand of only 60 mt. The government later scaled down its wheat output estimate to 69.48 mt and the farmers criticised it as “deliberate manipulation in the data”. The Delhi-based NGOs has filed a PIL in the Supreme Court challenging government’s policies.