Govt may import rice, has enough wheat

By Alistair Scrutton and Himangshu Watts

NEW DELHI (Reuters) - The government expects wheat supply and prices to remain manageable but the country may decide to import rice after the size of the harvest is known in two months, a top adviser of Prime Minister Manmohan Singh said on Tuesday.

C. Rangarajan, chairman of the Prime Minister's Economic Advisory Council, also said the country's wheat stocks of 28 million tonnes were adequate.

"It is a very large quantity. And I think by judicious distribution of the stock, we should be able to control prices and we should make adequate quantity of wheat available," he said in interview as part of the Reuters India Investment Summit.

Some traders in southern India have already imported small quantities of wheat. State trading firms had tendered to import 30,000 tonnes of rice but rejected the bids because they were too costly.

Rangarajan said the government's only worry was rice.

"I think, on wheat there is no problem ... Rice, we will have to see. We will see at the end of another one or two months," he said.

"But by way of abundant precaution, one could think in terms of importing. But that picture will become clear in another month and a half."

Food prices have risen sharply as India's agricultural output, particularly summer-sown rice, is expected to fall sharply after the worst monsoon in 37 years damaged crops.