Govt to buy wheat, shell out a whopping $390 per tonne

NEW DELHI, SEPTEMBER 3 After cancelling wheat import tenders for 10 lakh tonnes of grain on the excuse that $263 per tonne quoted by global suppliers was too high a price, the Government on Monday decided to buy 7.9 lakh tonnes of wheat by paying 150 per cent more or $390 per tonne, ostensibly to build its buffer stock to meet emergencies.

Official sources in the Food Ministry confirmed to The Indian Express that the decision was taken during a meeting of an EGoM headed by External Affairs Minister Pranab Mukherjee in the absence of Food and Consumer Affairs Minister Sharad Pawar, who is abroad.

The current import price at about Rs 16,000 per tonne is about 88 per cent more than the minimum support price (MSP) of Rs 8,500 per tonne at which the Government procured about 11.1 million tonnes of wheat directly from the farmers during the current Rabi Marketing Season (RMS), which ended mid-June this year.

The decision comes in the backdrop of a situation when the wheat supply in the domestic market this year is likely to be more comfortable in comparison to last year as the wheat production this year is up by about 8 per cent to about 75 million tonnes. In fact, even the wheat procurement this year has been up by about 20 lakh tonnes to about 11.1 million tonnes. Additionally, the opening wheat stocks in the country stood at about 4.7 million tonnes as against the usual norm of about 4 million tonnes.

Meanwhile, the Government decision to import at such high prices is likely to attract severe criticism from political parties and farmers’ organisations alike. However, the Government justified the decision as a necessary action to maintain sufficient buffer stock in the country. Pawar had earlier indicated that the Government plans to import about 5 million tonnes of wheat this year to build its buffer stock despite the fact that there is no scarcity of the grain.

Official sources in the Food Ministry pointed out that the imports have been necessitated by the fact that the wheat stocks in the country stood at 129 lakh tonnes as against the norm of about 171 lakh tonnes as on July 1 every year.

The current import order of 7.9 lakh tons will be in addition to an earlier wheat import order of 5.11 lakh tonnes two months ago when the Government had to pay about $325 per tonne.

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Govt to buy wheat, shell out a whopping $390 per tonne

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