(This article was originally published Tuesday.)


  NEW DELHI (Dow Jones)--India's food ministry has recommended a further hike
of INR250-INR750 ($5.65-$16.97) a metric ton in intervention price for wheat in
2007 to enable adequate local government buys and avoid imports, a senior
government official said Tuesday.

  The intervention or minimum support price at which the government is to
purchase wheat from farmers in 2007 had already been increased to INR7,500/ton
from INR7,000/ton a year earlier.

  The local purchases are scheduled to begin April 1, and volumes bought by the
government will determine whether India will import wheat this year.

  "Three options have been given to consider further increases in the wheat
support price by INR250/ton, or INR500/ton, or INR750/ton. The final decision
in this regard will be taken by the federal cabinet," the official told Dow
Jones Newswires.

  He said a panel of ministers headed by Minister for External Affairs Pranab
Mukherjee reviewed the wheat price and availability situation in the country
Tuesday.

  In India, the government buys wheat from farmers at a set intervention price
and then sells it to consumers at subsidized rates.

  Last year, traders purchased wheat from farmers at prices higher than the
intervention price set by the government. This led to a shortfall in the
government's procurement to run the subsidized sale programs that had to be met
through 5.5 million tons in imports, India's first such purchase from abroad in
over six years and largest by volume in several decades.

  In India, the cold arithmetic of wheat trade is such that any shortfall in
the government's local procurement results in a proportional volume of imports
to run subsidized sale programs.

  As a result, the government is extremely keen this year to maximize its own
purchases of wheat by offering an attractive price to farmers.