NEW DELHI: Despite a precarious foreign exchange position a comfortable and bumper crop of Wheat and estimated record production of rapeseed and mustard the government has been forced to import wheat and edible oil as the prices of the two essential commodities have shown an awkward rising trend.

Closing on the heels of the announcement to import one million tons of wheat if the need arises the import may go up to two million and even more the government’s decision to import three lakh tons of edible oils in the next two months indicates a panic reaction on the part of the Prime Minister.

P.V. Narasimha Rao and his finance minister Dr. Manmohan Singh.

The import order of Palmolive oil has already been placed with Malaysia and Indonesia according to sources. The additional three lakh tons of oil is being imported besides the 1.5 lakh tons imported earlier. For wheat imports the food ministry is to scout the European markets. Yet the shortfall in the edible oils is likely to be of the order of four lakh tons. The government has been left with no option but to resort to imports to arrest the galloping prices of wheat. The imports are aimed at warding off the “mischief making” potential of the hoarders sources said.

But the decision to import wheat is intriguing” on one count Export of about 8 lakh million tons of wheat by the Food Corporation of India.

Even as the proposals for the import of one million tons of wheat had been sent to the cabinet committee on prices the food minister Tarun Gogoi announced at a press conference early this month that the FCI has delivered five lakh metric tons of wheat to the STC and the MMTC for export. The minister while admitting that the wheat stock position was not as comfortable as the previous two years justified the export maintaining that the export of wheat would help earn precious foreign exchange.

The autoument to me Public Distribution System (PDS) is also claimed by the government to be about 4 million tons more than the last year. Yet the measures have failed miserably to check the spiraling prices under control. Despite the government claims that the FCI has offloaded large quantities of wheat in the market the prices have gone up steadily.

However the government does concede that the wheat stocks are plummeting fast and stood at least 2.5 million tons less than the buffer.

Article extracted from this publication >> February 7, 1992