NEW DELHI: The Government has finally decided to import one million tons of wheat from Canada, The first shipment will touch Indian shored in mid-July.

A contract to this effect was signed between the governments of the two countries in the second week of this month, official sources said,

This will be the first time in the recent past that the country will be undertaking such large imports of wheat in a non-drought year.

The Canadian wheat is meant to beef up sagging grain stocks and ensure supplies to the public distribution system during the season later in the year.

On March 20, a global terrier for import of one million tons of wheat from the open market was floated.

This was after the Government failed to persuade the Bush Administration to subsidize wheat to India.

The Government wanted the US to transfer committed subsidies on soybean oil purchase to wheat, but failed to get Washington’s consent

Twenty-five firms from major wheat producing countries responded to the March global tender. But the Government rejected the offers on the grounds that the prices were high.

Official sources said the price of wheat supplied to Canada on government-to-government basis would be “substanually below the ruling market rates.”

The contract was signed at the average rate of $145 per ton, the sources added. This works out to around Rs 430 a quintal.

The Government has had to import wheat on account of the alarming dip in cereal socks to just over 14 million tons at the end of April, a more than 22% drop from last year’s level of 18.5 million tons..

The reason for the drop in stocks is the sharp fall in procurement by the Food Corporation of India.

 The wheal procurement season is coming to an end and the total amount that will be procured is unlikely to exceed 15 million tons,

This will be 1.3 million tons less than the 7.8 million tons picked up by the FCI last year, which in any case was considered a “bad” procurement year,

The drop in procurement is: largely a consequence of the farmers agitation led by the Jharatiya Kisan Union in major wheat producing states like Punjab, Haryana and to lesser extent Uttar Pradesh.

The Government has conceded that on account of low wheat stocks, supplies for the PDs would have dried up by around December or January unless imports took place.

Article extracted from this publication >> June 10, 1994