Wheat prices may rise on likely SC stay

Apex court to hear plea against wheat import on May 17.

If the Supreme Court directs the Centre not to go ahead with wheat imports, then prices of the agri commodity may shoot up by 10-15 per cent in spot markets, according to a public interest litigation filed by activist Vandana Shiva.

A three member bench constituting Chief Justice KG Balakrishnan, Justice DK Jain and Justice RV Ravindran will hear the petition on May 17. Shiva questioned the government's motive in importing "inferior quality wheat" at Rs 1,600 a quintal, when a better quality was available in the domestic market in the range of Rs 800-1,000 a quintal. Interestingly, Shiva also mentioned in her PIL that the 2006-07 rabi production of wheat stood at 7.36 crore tonnes against 7.3 crore tonnes in 2005-06 "" more than the country's total requirement of wheat.

Dinesh Tanna, one of the major wheat traders of Rajkot, said, "If SC stays the imports, it will affect domestic prices of wheat in the spot markets. This may result into a 10-15 per cent price hike in the spot markets."

When asked about the quality of wheat imported by the private players for their own businesses, Tanna said, "The wheat imported by private players has to be approved through many regulations. The quality is as good as Indian wheat varieties as these players import wheat from Pakistan.

However, the wheat imported on government directives for the buffer stock is not so good. These consignments come from Australia, Ukraine and France."

Biren Vakil, an Ahmedabad-based expert on commodities, said the apex court will have to clear its stand on what will happen to the imported wheat awaiting approvals.

"Imported wheat has to undergo many genetic tests and quarantine period to ensure that no alien pests or harmful diseases enter the country via these consignments. This clearance process takes at least one-and-a-half months. Many consignments have already landed on the Indian ports before the PIL was filed," Vakil added.

Talking about how the possible stay on wheat imports can affect the domestic prices of wheat, Vakil said, "It will definitely firm the spot market. However, it will be a short term trend as we have registered a bumper crop this year."