India considers import of wheat from Russia with discount to regulate prices – Reuters

India is negotiating discounted imports of wheat with Russia amid sharp rise of global prices, which is a rare step aimed at increasing the supplies and curbing food inflation before next year’s elections in India.

Source: the Reuters agency with reference to four sources

"The imports would allow New Delhi to intervene more effectively in the market to drive down wheat prices that stoked inflation to a 15-month high in July," the agency reports.

"The government is exploring the possibility of imports through private trade and government-to-government deals. The decision will be made cautiously," revealed one of the sources of Reuters, responding to a question about import of wheat from Russia.

India has not made diplomatic agreements for import of wheat for many years. The last time that India imported a significant amount of wheat was in 2017 when private traders unloaded 5.3 million metric tonnes of the grain.

The Indian government’s plan to import Russian wheat is one of the measures that are being considered for reducing the prices of key goods, such as fuel and grains, as stated by anonymous sources.

Reportedly, the final decision may be made in a few weeks. The representatives of the Ministry of Finances and Trade and members of the government of India have not replied to emails and messages requesting to comment on the situation.

"Although India needs only 3 million to 4 million metric tons of wheat to plug the shortfall, New Delhi might consider importing 8 million to 9 million tons of wheat from Russia to have a far bigger impact on prices," another source explained.

Since the beginning of the war in Ukraine last year, Russia became the second largest supplier of goods to India, mainly thanks to discounts on the oil purchased by New-Delhi.

"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 of the anonymous officials stated.

The same official added that India is also importing sunflower oil from Russia, is conducting transactions in dollars and plans to continue using this approach.

"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 representing an international trading house stated.

Wholesale prices of wheat have increased by approximately 10% in two months and reached their seven-months maximum in August amid limited supply.

As of 1 August, 28.3 million tonnes of wheat were stored at the state storages, which is 20% below the average 10-year index.

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