India to buy local wheat before more imports

India, which on Monday floated a tender to buy one million tonnes of wheat, will decide whether to tap global markets again only once grain purchases from local farmers are over, a top official said. "Right now, we can manage up to January without much difficulty," Food Secretary T. Nanda Kumar told Reuters. "It all depends on how much we procure.
"I do not really need to panic or rush into imports," Kumar said. "This one million tonne import is because we feel that we might get it at a reasonable price." Kumar said the country had reserve stocks of 4.7 million tonnes on April 1, 2007, against 2 million tonnes last year, and state-run Food Corp had so far bought 8 million tonnes from farmers. Procurement of new season domestic wheat by Food Corp of India has been slow with some farmers holding back stocks in anticipation of better prices.
"If people are just holding back in the hope that prices will rise, I am not very sure that will happen," Kumar said. The federal government had asked state governments to crack down on firms illegally buying wheat directly from fields, rather than markets, to avoid taxes, he said.
Kumar said prices of essential commodities were under control and the government may release some stocks whenever prices rise, but would not cut import duty on palm oil.
India last month cut customs duty on crude palm oil and palmolein to 50 percent from 60 percent, and that on refined, bleached and deodorised palm oil and palmolein to 57.5 percent from 67.5 percent. "We have cut duties on palm oil as much as possible. Palm oil has found almost a parity with soyaoil," he said.
The customs duty on soyaoil is 45 percent. Kumar said the government would encourage greater use of ethanol to help sugar firms that are battling low global and domestic prices.
India is expected to produce a record 26 million tonnes of sugar during the crop year ending September, up from 19 million tonnes last year. State-run oil companies have been buying ethanol this year as part of a programme to blend it with petrol, but purchases have been slow so far due to quality issues, Kumar said.