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Journalism of Courage
The Government has revised its wheat estimates from about 73.7 million tonnes to 75 million tonnes. Though the final estimates are yet to be released officially, this is expected to add to the shrillness of those alleging that the Government has made an error in judgment while importing at a high price.
Being the second biggest producer of wheat, even a few million here and there affects world wheat prices. From 72.5 million tonnes quoted initially in the first estimates put out by the Government when the wheat was just planted, it revised it to 73.7 million tonnes in April. In the fourth advance estimates for this cropping season, it is now closer to 75 million tonnes. This estimate is the only one based on actual crop cutting experiments across farmers8217; fields. Reports are that both the yield and the acreage is up. The market buzz is that it is even higher, closer to 78 million tonnes.
The Government needs 12 million tonnes of wheat for welfare programmes and has managed to procure around 11 million tonnes of new season wheat from farmers. The rest has been bought by private companies and millers.
Even though the procurement is enough to meet the demands of PDS, the Government decided to import wheat. Last week, the State Trading Corporation finalised a tender for 5.11 lakh tonnes of wheat from global suppliers, who bid for a tender to supply 10 lakh tonnes of grain.
The Opposition parties are crying foul over the fact that STC had on May 30 cancelled a tender to import 10 lakh tonnes of wheat on grounds that the negotiating price of 263 was very high. However, barely a month later, it invited fresh bids till July 4. Seven companies including Cargill, Glencore and Toepfer quoted a price in the range of 318-370 a tonne.
This means the Government would have to pay at least 55 to as much as 100 a tonne additionally. The question that the BJP is raising is that they could have procured more had they paid the domestic farmer this additional price over the Rs 750 a quintal that they paid across the wheat-growing states.
Agriculture Minister Sharad Pawar has reiterated that imports are going to be a regular feature. This time, not so much for food security but for building a comfortable buffer. He said that another 3-5 million tonnes could be imported. They are hoping that that in November prices would ease when the Australian crop comes in.
Wheat prices touched a 11-year high on the Chicago Board of Trade in June and traders expect little respite as world supplies are seen falling to a 30-year low due to erratic weather in the United States and drought in Russia and Ukraine. India8217;s under-reporting of its wheat production added to the world wheat crisis and hence prices.
