India, the world's No 2 wheat importer, plans to limit its purchases at 2.3 million tonnes this year because of comfortable stocks, a senior Food Ministry official said on Wednesday. Farm Minister Sharad Pawar had earlier said the country would import around 5 million tonnes in 2007 to build large buffer stocks.
"Our stock situation will be quite comfortable after importing 2.3 million tonnes this year," the official, who did not wish to be identified, told Reuters. "Trends suggest harvests in 2008 will be a bumper."
India, also the world's second-biggest wheat producer, has already contracted to import 1.3 million tonnes in 2007 after buying 5.5 million tonnes last year, its first in six years. A senior government official said on Tuesday India would soon issue a tender to import one million tonnes of wheat. "We do not think there is any need for further imports," the food ministry official said on Wednesday.
The government's main grain procurement agency Food Corp of India is confident to build a buffer stock of more than 5 million tonnes on April 1, 2008 against a target of 4 million tonnes. Analysts believe an increase in procurement prices announced by the government for new season wheat to 1,000 rupees ($25.45) per kg, from 850 rupees in 2007, will encourage farmers to sow more wheat. A shortfall in global wheat markets, largely prompted by estimates of lower crop in Australia, would also spur farmers to grow more wheat globally, they said.
The return of Australia's worst drought in 100 years has cut the current wheat crop to around 15 million tonnes on latest forecasts - 40 percent less than first forecasts - and traders see further possible falls to 12 million tonnes.