India Intelligence Report
 

Opposition Parties Faults Govt on Wheat Import

 

The Government came in for sharp criticism on its decision to import 500,000 tons of wheat from Australia. The opposition accuses the Government of mismanagement of buffer stocks, bad planning to procure such a large quantity on the more expensive spot market, and lack of analysis to track supply, demand, and pricing. Many independent trade experts say that the Government should have allowed private importers to import such a large quantity as it did to meet sugar shortages. The experts project that the Government will pay an extra 30% for the lowest quality grain. The other issue is that the large import will arrive when domestic farmers will be ready to sell their Rabi crop. With a projected lower price for the imported wheat and an abundant domestic price could create a reverse problem where farmers may not get a fair price for their crop. The Government buys only 1/3 of the wheat production and 2/3 is left to market forces; this makes farmers vulnerable to a Government-created glut.

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