India to import 5 mt wheat

India, the world's second-biggest wheat producer, may import as much as 5 million metric tonnes of the grain this year to boost reserves, Agriculture Minister Sharad Pawar said.

"We have enough stocks for this year," Pawar said in New Delhi on Saturday. "But we may import 4 to 5 million tons of wheat to build stocks for emergencies."

Global wheat prices climbed to a 10-year high in October partly because India resumed imports in February 2006 after six years to meet a production shortfall. Prices are up 29 per cent in the past year. The country bought 6.5 million tonnes of wheat overseas last year.

Wheat futures for July delivery rose 11.5 cents, or 2.4 per cent, to $4.93 a bushel yesterday on the Chicago Board of Trade.

The central government, the single biggest buyer of food crops in the country, purchases cereals such as rice and wheat at guaranteed prices from farmers and sells them to the poor at subsidised rates through a chain of fair-price shops across the country. The assured prices are meant to protect farmers from distress sales in the open market.

The government has bought 9.2 million tonnes of wheat from farmers so far this year and it had a stockpile of 4.56 million tonnes on April 1. The government's annual requirement of wheat is 12 million tonnes.

The government plans to buy 15.15 million tonnes from this year's crop, up from 9.23 million tonnes last year, junior food minister Akhilesh Prasad Singh said March 2. Harvesting began in March.

The government has guaranteed farmers Rs 850 per 100 kilograms, less than the prevailing market price. Wheat output may cross 73.7 million metric tonnes estimated by the government last month, Pawar told reporters. India produced 69.35 million tonnes last year.

Indian wheat demand may reach 75.5 million tonnes as record economic growth boosts consumption of breakfast cereals, noodles, biscuits and cakes, according to a Bloomberg survey last month.