In order to control wheat prices and increase supply, the government is preparing to reduce the import duty on wheat. The government is preparing to resume wheat imports by reducing the duty on inbound shipments as well as imposing stock limits on grains. The government is also planning to start open market operations (OMO) sales. According to a Livemint report, India imposed a 44% duty on wheat imports six years ago. This effectively halted grain shipments to India, the world’s second-largest wheat producer.
The issue is sensitive for farmers
According to reports, traders are asking the government to relax import rules so that they can resume imports at a time when international prices are low due to a surge in Russian production. Officials say the matter is sensitive for farmers and any duty cuts will have to take that into account. According to an official, if India imports, it is unlikely to exceed 3-4 million tonnes. The government estimates that wheat production in the 2024-25 season will be at 112.9 million tonnes, the same as last year.
Wheat can be landed at these ports
A second official said that if the duty is cut, allowing private wheat imports, international wheat is likely to reach India through all major south Indian ports from July 1. Currently, the landed price of wheat at Kochi port in Kerala and Tuticorin port in Tamil Nadu is $280-$290 (₹23,398-₹24,233) per tonne. Port handling and packaging costs are ₹1,500. If the 44% duty is abolished, the effective price will be around ₹25,000 to ₹26,000 per tonne. These changes are based on the currency value of June 2023.
Domestic price of wheat in mandis
According to spot traders, the domestic price of wheat is ₹26,980-27,100 per tonne in major mandis and the minimum support price for wheat is ₹2,275 per tonne. According to data from the Ministry of Consumer Affairs, the all-India average price of the staple grain on Sunday was ₹31 per kg, up 6.4% over last year, and the wholesale price was ₹27,720 per tonne, up 6.6% over last year.
Latest Business News