India Plans To Import Wheat From Russia At Discounted Rate To Cool Prices: Reports

India has not imported wheat through diplomatic deals in years. The last time India imported a significant amount of wheat was in 2017, when private traders shipped in 5.3 million metric tonnes

Wholesale wheat prices soared around 10 per cent over two months to a seven-month high in August on limited supplies.

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In a move to boost supplies and curb food inflation ahead of state and general elections scheduled for next year, the Centre is holding talks with Russia to import wheat at a discount to surging global prices, quoting four sources news agency Reuters said. According to the report, the imports would allow the government to intervene more effectively in the market to drive down wheat prices that stoked inflation to a 15-month high in July.

One of the sources told the news agency, "The government is exploring the possibility of imports through private trade and government-to-government deals. The decision will be made cautiously," when asked about wheat imports from Russia.

India has not imported wheat through diplomatic deals in years. The last time India imported a significant amount of wheat was in 2017, when private traders shipped in 5.3 million metric tonnes.

The Centre's plan to import Russian wheat is one of the supply-side measures being considered to bring down prices of key commodities such as fuel, cereals, and pulse along with an extension of rural schemes to ease the impact of inflation on the poor, two of the sources told Reuters.

The final decision might be weeks away, according to the people privy to the development.

Last month, Sanjeev Chopra, the most senior civil servant at the federal food ministry, said there was no proposal to import wheat from Russia.

Though India needs only 3 million to 4 million metric tonnes of wheat to plug the shortfall, the government might consider importing 8 million to 9 million tonnes of wheat from Russia to have a far bigger impact on prices, another source said.

Since the war in Ukraine last year, Russia has become India's second biggest seller of goods mainly on account of discounted oil purchases by the government. "Russia has indicated its willingness to offer a discount on prevailing market prices. There are no restrictions on the export of food commodities from Russia," one official said.

Wholesale wheat prices soared around 10 per cent over two months to a seven-month high in August on limited supplies. Wheat stocks at government warehouses were at 28.3 million tonnes on August 1, 20 per cent below the 10-year average.

The government banned wheat exports last year because of lower output, and this year's crop is also expected to be at least 10 per cent lower than the government's estimate.

India is also importing sunflower oil from Russia and settling payments in US dollars and is planning to use the same approach, the official added.