Govt to curb STC's monopoly of wheat imports

The central government is all set to break the state trading corporation's (STC's) monopoly on wheat imports, the agency that has so far been single-handedly contracting wheat imports for the central pool.

At an emergency meeting held here on Friday, the empowered group of ministers (EGoM) on wheat, headed by the union minister for external affairs Pranab Mukherjee, has decided in all future wheat import contracts, both MMTC and PEC, which are trading corporations under the commerce ministry, will also be involved.

However, STC, which is also a commerce ministry body, will continue to import wheat, said highly placed sources in the food ministry.

The suggestion to involve both MMTC and PEC has come from Kamal Nath, the union commerce minister, who is also a member of the EGoM. The move is expected to ensure wheat imports at more competitive rates.

Both MMTC and PEC have for long been engaged in import of pulses like urad and tur on government and commercial account and wheat on commercial account.

In 2006-07, STC contracted imports of 5.5 million tonnes wheat at an average rate of $205 per tonne, after the government's procurement fell to 9.2 million tonnes. The imported wheat was used in the public distribution system.

This year too, the corporation had contracted two wheat imports. In a July tender, the federation contracted import of 5.11 lakh tonnes wheat at an average rate of $325 per tonne and in an August tender import of 7.95 lakh tonnes wheat was contracted at $389.45 per tonne.

Both the July and August wheat import contracts have come under criticism from various sections, including the Left parties that are supporting the Union Progressive Alliance (UPA) government at the centre.

This was primarily due to the high rates at which wheat has been purchased in the last two tenders.