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India decided on July 10, 2007, to import half the 1 million tonnes of wheat for which it floated a tender. On May 30, 2007, India scrapped the tender claiming that the price quoted by foreign companies -- $ 263 per tonne -- was too high (see earlier report ‘High prices force India to cancel wheat import' ).
It will now import 511,000 tonnes of wheat at $ 317-$ 330 per tonne from three global firms, Cargill, Toepfer and Riaz. The grain is set for delivery between August and November, according to the tender document.
Experts say the price is too high and the Indian government should have waited until Australian wheat became available in October which would have pushed down prices.
India needs 12 million tonnes of wheat annually to feed the poor through its public distribution system. It has bought around 11 million tonnes of new-season wheat from local farmers.
In April, the government had around 5 million tonnes of grain in its buffer stocks which, traders say, was adequate to meet consumers' needs for the time being. There was no urgency to buy wheat at prices higher than the rates at which they were available in the domestic market, they argue.
India is expected to produce over 73 million tonnes of wheat in 2007, up from 69.48 million tonnes last year.
Meanwhile, the standoff between India and the US on wheat import standards continues. The United States has criticised India's wheat import regulations as “unrealistic” after strict controls on weed presence, fumigation and inspection barred purchases of US grain in a recent tender.
“India's very low weed seed standard is nearly impossible for any global exporter to meet, raising questions about the reliability of India's import inspection process,” said a statement from the US embassy in New Delhi. “The US calls upon the Government of India to conduct independent tests on imported wheat arriving in Indian ports to verify that these standards are truly being met.”
The two countries have been discussing the issue, but no solution is yet in sight.
Although some analysts say New Delhi's rules are pushing up prices, India's agriculture minister Sharad Pawar says the country is willing to pay more for quality wheat imports, but will not compromise on safety.
“It is difficult for us to compromise on phytosanitary norms... These were fixed long back,” he said. There were other countries such as Argentina, Russia and Australia that fulfilled Indian norms for exporting wheat, he added.
July 11, 2007
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