India signs deals to import 5 lakh tonnes wheat

The flour mills in India have signed to buy 5 lakh tonnes of wheat from France and Australia.

The Dollar Business Bureau

The flour mills in India have signed deals to buy 5 lakh tonnes of wheat from France and Australia, for delivery between July-September, in the wake of a possible shortfall in domestic production, due to severe drought.

Last year alone, private flour mills had imported around 5 lakh tonnes of wheat from Australia; huge import for the first time in the last 10 years because of slow supply of high protein wheat from local markets and lower global prices. 

According to some traders, India is expected to import wheat, somewhere between 3 and 5 million tonnes, and the imports duty will reduce by 25%.

The traders also said that flour millers have contracted about 350,000 tonnes of wheat from Australia and 150,000 tonnes from France. Domestic traders feel that the government’s estimate of wheat output is higher, however, there would be a shortage of roughly 4 to 5 million tonnes, due to the impact of drought.

The government had targeted to purchase 30.5 million tonnes of wheat for the year, but met with a shortfall—it has already purchased 22.8 million tonnes till date.

Until April 1st this year, the Food Corporation of India (FCI) had a stock of wheat, somewhere around 30 million tonnes, which was way more than the original requirement of 7.46 million tonnes.

And as per the Ministry of Agriculture’s estimates, despite drought for the second year and unseasonal rains impacting the output, wheat production has been estimated at 94.04 million tonnes for the crop year 2015-16 (July-June).

India has produced 86.53 million tonnes of wheat in the previous crop year.

The Dollar Business Bureau - May 26, 2016 12:00 IST