| "An arm of the Axis Bank (formerly UTI Bank) was engaged in contracting wheat options on behalf of the food ministry. However, the rates offered were as high as $301 a tonne and the quantity offered was only 65,000 tonnes," said a food ministry official. |
| "It makes no sense to buy wheat at such high rates and therefore it was felt that the system of importing wheat through tenders was more suitable," he added. |
| The original intention of the government was to hedge against the fluctuating wheat prices in the international market by buying 20 lakh tonnes in options. |
| It was expected that the hedging would help the government to reduce the import bill as international prices rise whenever India decides to import wheat. |
| The food ministry has also scrapped the 10 lakh tonnes wheat import tender floated by the State Tender Corporation (STC) on April 30 as rates were high and ranged between $265 and $302 a tonne. This is a sharp rise over the $205 a tonne average price that the government paid last year while importing 55 lakh tonnes wheat. |
| Meanwhile, STC has been directed to come out with fresh tenders after studying international prices, he said. It has also been decided to extend the bonus of Rs 100 a quintal on wheat to June 15 in Punjab and Haryana, which was originally scheduled to lapse today. The bonus will continue till June 30 in Uttar Pradesh and Rajasthan and till July 15 in Bihar. |
| As on May 30, the government had bought 105.13 lakh tonnes of wheat in the current rabi marketing season at a minimum support price (MSP) of Rs 850 a quintal. |
| This is about 14 per cent higher over last year's corresponding purchase of 92.20 lakh and about 13.8 per cent higher over last year's total purchase of 92.31 lakh tonnes. |
| However, a decision to import wheat was taken to augment stocks since the procurement was not enough to meet the annual public distribution system (PDS) requirements and begin next year's procurement with a comfortable buffer stock. |
Top Section
Explore Business Standard