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| Millers may import wheat as domestic prices top global rates |
| Press Trust of India / New Delhi Aug 28, 2009, 15:48 IST |
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After a two-year gap, flour millers may resume wheat import with the purchase of about 25,000 tonnes from abroad in the next two months, to start with, as fears of the impact of drought have kept rates in the domestic market firm and above global prices.
Flour millers said they are looking at markets like Russia and Ukraine to import wheat this year, and if the government does not take timely decision when to offload the foodgrain from its reserves in the domestic market, they would not have any option but to seek refuge in overseas purchases.
"Millers are likely to import 25,000 tonnes of wheat, to start with, in two months," Roller Flour Millers Federation of India President M K Dattaraj said, adding the quantity may go up if the decision on sale from central reserves is delayed.
Earlier this month, an empowered group of ministers decided to offload wheat in the local market from reserves, whenever necessary, to curb price rise.
Dattaraj noted that domestic prices are ruling higher, making import a more profitable option. Domestic prices are ruling at Rs 13,300 a tonne, compared with the imported prices of about Rs 12,200, he said.
The government had imported about 73 lakh tonnes of wheat in 2006 and 2007 to run the public distribution system.
The Centre procured record quantity of wheat this year at 253 lakh tonnes for its reserves limiting, however, foodgrain supply in the open market to some extent, he said.
Dattaraj said even if the government decides to offload wheat in the open market at support prices, import may still be cheaper.
For example, the price of wheat in Karnataka may touch Rs 12,670 a tonne, taking into account the procurement price along with freight charges, compared with the imported price of Rs 12,200, he said.
However, the open market sale may prevent prices from any further escalation.
The government last year released about 12 lakh tonnes of wheat in the open market for bulk consumers like flour millers.
Besides normal wheat variety, millers are also looking to import protein-rich wheat from Australia, though at higher prices, to meet demand from manufacturers of high-quality bread and paranthas, he said. The imported price of the premium variety of wheat is around Rs 14,000-14,500 a tonne.
The millers have also appealed to the government to relax the Plant Protection Quarantine norms, which has put curbs on the existence certain weeds in the imported wheat, among others.
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