Govt may allow licence free wheat import

Imports by the private sector in addition to the one planned by STC

The government is considering allowing wheat imports under the open general licence (OGL). It is also reviewing the customs duty on wheat for such imports.

OGL allows any individual or entity to import goods and such imports do not require any licence.

This was indicated by agriculture and food minister Sharad Pawar here today. He said the wheat-based industry, including the biscuit and bread manufacturers and roller flour mills, were demanding permission for direct import of the commodity. Their plea was under consideration of the government.

Wheat imports by the private sector would be in addition to 3.5 million tonne of wheat proposed to be imported on official account at zero import duty by the State Trading Corporation (STC).

While the decision to import of 0.5 million tonne of wheat was taken in early February, an additional 3 million tonne import was announced last week in view of the anticipated shortfall in wheat procurement for the Central grain pool.

The STC has already contracted for 0.5 million tonne of wheat and the shipments are expected to begin arriving in a day or two. The process of floating fresh tenders for additional 3 million tonne is in progress.

Pawar indicated that 3.5 million tonne of imports should be adequate for the public distribution system (PDS).

Referring to mopping up of wheat by the private trade at prices slightly above the support price, he said as agriculture minister, he was happy that the wheat growers were getting better returns. But, being also the food minister, he had to insure that the wheat requirement for the PDS was met. This necessitated wheat imports on official account.

He maintained that there would be no fall in wheat production this year. The official estimates had projected the output at 73.06 million tonne this year, against 72 million tonne last year.

But, wheat procurement by the Food Corporation of India (FCI) and state agencies was now projected to fall short of the expected level of 16.3 million tonne. The latest estimates indicate that the actual procurement might not touch even the 15 million tonne mark.

The government needs over 16 million tonne of wheat to meet its PDS and other obligations. The official wheat stocks had declined to 1.9 million tonne on April 1, on the eve of the commencement of the wheat procurement season in the country's major wheat belt of Punjab, Haryana and Uttar Pradesh.

Though the government had announced a bonus of Rs 50 on top the minimum support price of Rs 650 a quintal for wheat, but this move did not help in boosting grain procurement prospects.

The bonus led to further firming up of wheat prices, prompting the farmers to sell to the private trade at higher prices rather than offering the stocks to public agencies.