Why is India considering importing wheat from Russia?


Welcome viewers it comes as a shock to everyone that India is thinking about purchasing wheat from Russia. The decision by the Indian government to import wheat is supported by a variety of factors. We'll talk about a few of these causes in our blog post today.   Amid a dramatic rise in world prices, India is negotiating with Russia to import wheat at a reduced price, taking the unusual step of expanding supplies and reducing food inflation before elections in India the following year according to a report published by the news agency Reuters.

The imports would enable New Delhi to interfere in the market more effectively to reduce the price of wheat, which in July drove inflation to a 15-month high.

India has not entered into diplomatic arrangements to import wheat for many years. The last time India brought in a sizable quantity of wheat was in 2017 when private dealers shipped out 5.3 million metric tonnes of the crop.

One supply-side strategy being investigated by the Indian government to lower the cost of essential goods like petroleum, cereals, and pulses is the importation of Russian wheat. This strategy is combined with an expansion of rural programs to lessen the impact of inflation on the poor.

Although India only requires 3 to 4 million metric tons of wheat to make up the gap, New Delhi may think about importing 8 to 9 million tons of wheat from Russia to have a much greater impact on pricing, according to a different source.

Due in large part to discounts on the oil that New Delhi purchased, Russia has overtaken China as the second-largest exporter of goods to India since the start of the conflict in Ukraine last year.

India can easily negotiate a reduction with Russia of $25 to $40 per ton. This will guarantee that wheat's landed cost stays much lower than local pricing, according to a Mumbai-based dealer who represents an international trading business.

Due to a shortage, wheat wholesale prices rose by around 10% in just two months, peaking in August at their highest level in seven months.

28.3 million Tonnes of wheat were kept in state storage as of 1 August, which is 20% less than the 10-year average index.

India experienced variable rains even this year. While some states are still waiting for rain, others experienced flooding. Wheat production was already impacted by heat waves during the previous growing season. The only goal of the Indian government is to guarantee the local markets' access to food.

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