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India could search as much as 9 mln tons of Russian wheat-source

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Russia providing discounted wheat worth – supply

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Indian wholesale wheat costs at 7-month excessive

By Aftab Ahmed and Rajendra Jadhav

NEW DELHI/MUMBAI, Aug 17 (Reuters) – India is in talks with Russia to import wheat at a reduction to surging world costs in a uncommon transfer to spice up provides and curb meals inflation forward of state and nationwide elections subsequent yr, based on 4 sources.

The imports would permit New Delhi to intervene extra successfully out there to drive down wheat costs that stoked inflation to a 15-month excessive in July.

“The government is exploring the possibility of imports through private trade and government-to-government deals. The decision will be made cautiously,” one of many sources informed Reuters, when requested about wheat imports from Russia.

India has not imported wheat by way of diplomatic offers in years. The final time India imported a big quantity of wheat was in 2017, when personal merchants shipped in 5.3 million metric tons.

The authorities’s plan to import Russian wheat is among the supply-side measures being thought of to deliver down costs of key commodities like gasoline, cereals and pulse together with an extension of rural schemes to ease the affect of inflation on the poor, two of the sources with data of the matter stated.

Sources didn’t need to be named because the discussions are personal and the ultimate choice is perhaps weeks away. India’s finance, commerce and authorities spokespersons didn’t reply to emails and messages in search of remark.

Last month, Sanjeev Chopra, essentially the most senior civil servant on the federal meals ministry, stated there was no proposal to import wheat from Russia.

LOW WHEAT STOCKS

Although India wants solely 3 million to 4 million metric tons of wheat to plug the shortfall, New Delhi may take into account importing 8 million to 9 million tons of wheat from Russia to have a far larger affect on costs, one other supply stated.

Since the conflict in Ukraine final yr, Russia has turn into India’s second greatest vendor of products primarily on account of discounted oil purchases by New Delhi.

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“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 stated.

India can be importing sunflower oil from Russia and settling funds in U.S. {dollars} and is planning to make use of the identical method, the official added.

“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,” stated a vendor primarily based in Mumbai with a worldwide commerce home.

Wholesale wheat costs in India surged round 10% over two months to a seven-month excessive in August on restricted provides.

Wheat shares at authorities warehouses had been at 28.3 million tons on Aug. 1, 20% beneath the 10-year common.

Last yr, India banned wheat exports attributable to decrease output, and this yr’s crop can be anticipated to be at the least 10% decrease than the federal government’s estimate.

(Reporting by Aftab Ahmed and Rajendra Jadhav; Additional reporting by Mayank Bhardwaj; Editing by Sonali Paul)