No takers for duty-free import of wheat

The government decision to extend the period for duty-free wheat imports till December 31 is unlikely to help private players as international prices are too high.

Trade officials say private companies have already imported about 1.5 million tonne of wheat since August 2006, when they were first allowed to tap overseas markets at zero duty.

Global prices are around Rs 1,150 per 100 kg while prices in India are at Rs 1,000, a Roller Flour Millers Federation of India office-bearer said.

The traders do not see large-scale imports beyond 1.5 million tonne already shipped into the country.

Duty-free imports are now allowed up to December 31. If the government was able to buy 15

million tonne of new crop wheat from farmers for its buffer stocks, domestic prices might fall further.

Traders find domestic prices more attractive than scouting for wheat in global markets now.

Dealers are unlikely to import further, at least until the government completes its procurement.

Last year the government managed to buy just 9 million tonne of wheat against a target of 16 million tonne as private firms like Cargill and ITC offered prices above the government rates.

India, the world's second-biggest wheat producer, is likely to produce more than 72.5 million tonne of wheat in 2007, significantly up from the 69.4 million tonne harvested in 2006.