Imports up, prices down

According to the 4th advance estimates released this week, wheat production during 2005-06 is estimated to fall short of the target by 6 million tonnes to touch 69.48 million tonnes.

According to the 4th advance estimates released this week, wheat production during 2005-06 is estimated to fall short of the target by 6 million tonnes to touch 69.48 million tonnes. The target had been previously brought down from 71 million tonnes.

With both the Left and the BJP attacking the government over rising food prices, the government says that its elaborate import plans8212;quick and large-quantity import was the first antidote it thought up8212;have already impacted the market positively. The shortfall in wheat was anticipated earlier.

The State Trading Corporation STC has floated tenders for 35 lakh tonne of wheat. Shipments of more than one lakh tonnes have already arrived in the southern Indian ports.

The arrivals are expected to continue at regular intervals, with four ships carrying a total of 1,61,500 tonne entering Chennai, Tuticorin, Vishakhapatnam and Cochin ports between end-July and the third week of August. The rest will come in by next January.

Other than wheat, the first batch of imported pulses will start arriving from this month at Mumbai, Chennai and Kolkata. Elaborate import schedules have been worked out by the Food and Consumer Affairs Ministry.

8216;8216;The government has taken some steps to ensure wheat, sugar, pulses come to the market,8217;8217; said a government spokesperson. 8216;8216;The government also hopes that hoarding will come down and essential commodities will flow into the market.8217;8217;

Just over a month after floating tenders for import of pulses such as tur, moong and urad, Nafed8212;handling the deal, alongside PEC and MMTC8212;has already awarded contracts for 25,000 tonne of urad. Of this, 15,000 tonnes is scheduled to come in this month while the rest will follow in early August.

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With India the largest producer and importer of pulses, it is yet unclear whether the world market is capable of supplying as much as the government may demand. However, the authorities hope the announcements themselves will stabilise the prices.

The production of pulses this year has been 13.92 million tonnes8212;not substantially lower than in the last five years8212;but prices have risen sharply for all the pulses.

For moong, contracts had been awarded for 5,000 tonne. Of this 3,000 tonne is expected to land this month and 2,000 tonne by mid-August. Besides, PEC will import about 81,000 tonne of urad, moong, tur and chana dal.

Officials said the prices of these items have already started declining; further drops are expected in the coming days. The spot and future prices of tur declined by 17 per cent in four days following these announcements.

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Allaying fears that wheat prices would shoot up due to dip in production, the Union government has said there were enough stocks of the foodgrain to meet the current demand and its price had shown a decline. Spot prices of wheat has declined from Rs 922 a quintal on February 1 to Rs 864 a quintal this month.

Rice leads from the front

According to the 4th advanced estimates released by the Agriculture Ministry, foodgrains production in the country is estimated to register a 5 per cent increase during 2005-06 to touch 208.3 million tonne. In 2004-05, it stood at 198.36 million tonne.

The rise in output is led by an impressive performance on the rice front, where the output is estimated to exceed the target of 75.45 million tonne by 2.59 million tonne during 2005-06.