India is in talks with Russia to import wheat at a subsidized rate despite rising global prices in a rare move to boost supplies ahead of state and national elections next year and curb food inflation, according to four sources. .

The imports would allow New Delhi to intervene more effectively in the market to bring down wheat prices, which drove inflation to a 15-month high in July.

Asked about wheat imports from Russia, a source told Reuters: “The government is exploring the possibility of imports through private trade and government-to-government deals. The decision will be taken carefully.”

India has not imported wheat through diplomatic deals for years. The last time India imported wheat in large quantities was in 2017, when private traders imported 5.3 million metric tonnes.

The government’s plan to import Russian wheat is one of a series of supply-side measures to reduce prices of key commodities such as fuel, cereals and pulses, as well as an expansion of rural schemes to reduce the impact of inflation on the poor. Simultaneously, sources having knowledge of the two cases told.

The sources did not wish to be named as the discussions are private and a final decision could take weeks. India’s finance, trade and government spokespeople did not respond to emails and messages seeking comment.

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

wheat stock low

While India needs only 3 to 4 million metric tonnes of wheat to meet the shortfall, another source said New Delhi is looking at importing 8 to 9 million metric tonnes of wheat from Russia to have a far greater impact on prices. can consider.

Since the war in Ukraine last year, Russia has become India’s second biggest seller of goods mainly due to subsidized oil purchases by New Delhi.

“Russia has expressed willingness to offer discounts on prevailing market prices. There is no restriction on export of food items from Russia,” said an official.

The official said India is also importing sunflower oil from Russia and settling payments in US dollars and plans to use the same approach.

A Mumbai-based dealer of a global trading house said, “India can easily get a discount of $25 to $40 a tonne from Russia. This will ensure that the cost of wheat remains much lower than local prices.”

Wholesale wheat prices in India rose nearly 10% in two months to hit a seven-month high in August on tight supplies.

Wheat stocks in government warehouses stood at 28.3 million tonnes on August 1, which is 20% less than the 10-year average.

Last year India banned wheat exports due to low production and this year’s crop is expected to be at least 10% less than the government had estimated.

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