India to import more wheat despite high prices

India will import more wheat this year despite high global prices, the farm minister said on Monday, as its first priority is to secure enough grain to feed a billion people. Last week, the government decided to buy 511,000 tonnes of wheat at $317-$330 per tonne against a tender for a million tonnes, kicking off a second straight year of imports.
"If there is a question of feeding our population, prices are not the issue," Sharad Pawar told reporters when asked if further purchases were possible. In May, the government had scrapped an earlier tender for imports of one million tonnes as it considered the average bid price of $263 per tonne to be too high.
It then paid out far more for grain. "When we scrapped the tender, the government was still buying wheat from farmers. Price bids were higher than what we were paying to farmers," Pawar said. "We could not have imported at prices higher than what we paid to our farmers."
He said the government bought 900,000 tonnes from farmers between calling off the first tender and issuing the second. Needing 12 million tonnes of wheat annually to feed the poor through welfare programmes, it has now amassed around 11 million tonnes domestically.
"When we decided not to import in May, market indications available with us did suggest prices will drop as the situation was not that grim in Russia and Ukraine," Pawar said.
US PRESSURE: Wheat prices on the Chicago Board of Trade touched 11-year high in June and traders expect no let up as global output is seen falling to a 30-year low due to erratic weather in the United States and drought in Russia and Ukraine.
Prices have eased since then but still remain historically high with September wheat at CBOT ending on Friday down 3/4 cent at $6.20-3/4 per bushel. "There is no shortage of wheat. But we need to import to meet any eventuality or emergency," Pawar said.
India, which is likely to produce more than 73.7 million tonnes of the grain in 2007, consumes around 72 million tonnes annually. It produced 69.48 million tonnes in 2006
Pawar said that had the United States participated in this year's tenders, price bids might have been lower. The US has criticised India's wheat import regulations as "unrealistic" after strict controls on weed presence, fumigation and inspection barred purchases of US grain. "There was demand from the US to dilute norms but the scientific community was not in favour of allowing dilution," Pawar said.