India plans to import 9MT of Russian wheat to deal with price hike & augment reserves

The centre is considering the import of 9 million tonnes of wheat from Russia through a government-to-government agreement to bolster domestic reserves in light of increasing prices. According to sources familiar with the matter, the All-India Consumer Wholesale Price of wheat saw a 6.2% rise, reaching ₹2,633 per quintal on Wednesday, compared to ₹2,480 a year ago. The surge in prices can be attributed to the government’s implementation of stockholding limits and the selling of wheat in the open market to traders due to concerns over a potential shortfall in domestic production. In order to address this situation, the authorities are exploring the possibility of acquiring wheat from Russia to supplement domestic stocks and stabilize the market. “The possibility (of imports) is being discussed at the highest levels,” a person aware of the matter told Economic Times. The price of wheat has been rising in India due to a combination of factors including low production, declining stocks, and increasing demand. The government had initially estimated the country’s wheat production at a record 112.7 million tonnes (MT) in 2023. However, traders and millers have estimated the harvest to be around 101-103 MT, citing damages caused by unseasonal rain and hailstorms across the northern, central, and western plains in February and March. In response to queries about the fluctuating retail prices of wheat, Sadhvi Niranjan Jyoti, Minister of State for Consumer Affairs, Food, and Public Distribution, said that the government is closely monitoring the prices. The average retail price of wheat showed a decline from Rs. 31.58 per kg in January to Rs. 28.74 per kg in May, but later increased to Rs. 29.59 per kg in July. Adding to inflationary concerns, a report by Crisil, as cited by ET, highlighted the impact of Russia’s withdrawal from the Black Sea grain deal. This development has raised inflationary risks since Russia and Ukraine are major global wheat and sunflower oil suppliers. As the situation unfolds, authorities and stakeholders in India are closely observing the market dynamics and working towards stabilizing wheat prices and ensuring adequate food supplies for the population.