India mulling wheat imports from Russia – Reuters
India is in talks with Russia on wheat imports at a discounted price as it seeks to tame inflation amid rising global prices, Reuters reported on Thursday, citing sources familiar with the matter.
New Delhi is looking to boost supplies from Russia in a bid to drive down domestic wheat prices, which fueled inflation to a 15-month high in July, the outlet wrote. Indian wholesale wheat prices soared by around 10% over two months to a seven-month high in August on limited supplies.
“The government is exploring the possibility of imports through private trade and government-to-government deals. The decision will be made cautiously,” Reuters said, citing one of the sources.
Although India only needs 3 to 4 million metric tons of wheat to cover the shortage, New Delhi might consider importing 8 to 9 million tons of wheat from Russia in order to intervene in the market more effectively and bring the prices down, another source told the outlet.
“India can easily secure a discount of $25 to $40 per ton from Russia. This will ensure that the landed cost of wheat remains significantly below local prices,” a Mumbai-based dealer with a global trade house said.
India has not imported wheat through diplomatic deals since 2017. It previously bought wheat from Ukraine, Russia, and Australia, but starting from 2018, the country sharply limited agricultural imports in order to support domestic producers.
According to the Economic Times, the decision on a wheat deal with Russia could be made in the next few weeks.
The Indian government is considering Russian wheat imports as one possible measure to cool down the prices of key commodities such as fuel and cereals to alleviate the impact of inflation on low-income households, the outlet said.
Consumer inflation jumped to 7.44% in July, rising well above the Reserve Bank of India’s 6% target for the first time since February amid soaring food and vegetable prices.
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