Mumbai: The government has allowed import of 20 lakh tonnes of wheat at zero customs duty, in addition to the 38.30 lakh tonnes that the public sector State Trading Corporation is importing. The imports are being channelised through the Food Corporation of India and will continue till February 28, 2007.

The imports are aimed at meeting the shortfall in wheat procured for the public distribution system (PDS). The imports will be allowed only through Chennai, Tuticorin, Cochin and Vishakhapatanam ports, the Directorate General of Foreign Trade said in a notice.

In addition to this, other state-owned firms like MMTC Ltd and PEC Ltd are also importing 40,000 tonnes of wheat each for private traders at five per cent customs duty.

Wheat imports are being made to check prices and meet the projected shortfall in procurement by FCI for the PDS. The government had targeted procurement of about 160 lakh tonnes of wheat by July 1 this year, but has managed to buy only 92 lakh tonnes so far.

The Centre has also decided to allow state governments to put caps on the amount of wheat and pulse stocks individuals or traders can hold in order to stop hoarding. The cabinet also decided to lift restriction on inter-state movement of these items.

A government statement said the cabinet took the decision after some states sought powers under the Essential Commodities Act, 1955, to stop hoarding of wheat in anticipation of higher prices.

Wheat prices have been rising due to poor output while pulses prices have been rising because of a shortage in supplies from a major exporting country.

The order will be effective for six months.