No plan to cut import duty on wheat now: Official
The Indian government is unlikely to reduce wheat import duties or initiate open market sales soon due to sufficient domestic supplies and single-digit inflation. The Food Corporation of India (FCI) has a surplus of 22.9 million tonnes of wheat, exceeding the buffer requirement. Despite stable prices, the FCI allocated 2.5 million tonnes for open market sales in the 2024-25 fiscal year, starting at ₹2,325 per quintal, lower than current market prices of about ₹2,800. Wheat output for the 2023-24 season is projected at 113.29 million tonnes.
With sufficient stock with the trade and single digit inflation for the last one year, the government may not opt for any reduction in import duty of wheat soon. Also, it may not start open market sales for bulk buyers from its surplus stock yet.
The Food Corporation of India had offloaded a record 10 million tonne (MT) of grain in the market to cool down the prices in FY24.
“There are sufficient domestic supplies currently and we have not decided to commence open market sale of wheat yet,” an official said. Sources said the traders and stockists have declared wheat stock of close to 9 MT on the food ministry portal.
At present, the FCI has around 22.9 MT of wheat, against a buffer of 20.52 MT for October 1.
The food ministry has allocated 2.5 MT of wheat for open market sale for 2024-25 from the government’s stocks. Last year, the open market sale operations began from June 1. The FCI would start offloading wheat at a price excluding transportation at Rs 2325/quintal.
The prices offered under open market sale is lower than the prevailing market prices of around Rs 2800/quintal in Delhi.
“Currently wheat prices are largely stable, while there are some issues about supplies to southern states,” Dharmendra Jain, President, Uttar Pradesh Roller Flour Millers Associations, said.
Last month, two years after the government had cut allocation of wheat to ten states, the government had partially restored wheat entitlements to the beneficiaries under the Pradhan Mantri Garib Kalyana Anna Yojna (PMGKAY) by allocating 3.5 MT of the grain, instead of rice, till end of FY25.
After this restoration, the annual wheat allocation to free ration scheme will rise to 22 MT, but will be short of the 28 MT used to be allocated prior to May, 2022.
In June, the government had imposed stock holding limits on wheat for retailers, wholesalers, processors and big-chain retailers till March, 31, 2025.
In April, 2019, import duty on wheat was increased to 40% from 30%.
Officials stated that there was no shortage of wheat in the country, the move to impose stock holding limits on the commodity would help improve supplies. They have also ruled out lifting the export ban on wheat imposed in May 2022.
According to the agriculture ministry, wheat output in the 2023-24 crop year (July-June) is estimated at 113.29 MT.
Inflation in wheat was 6.71% in September and price rise has been in single digit since August 2023. Due to lower output in the 2022-23 crop year, inflation in wheat was at record 25.05% in January, 2023.
Recently the minimum support price (MSP) of wheat, the key rabi crop, has been raised by 6.6% to Rs 2,425/quintal for 2025-26 season, while in the previous year remunerative prices were hiked highest at 7.05% to Rs 2,275/quintal.
Source Link : https://www.financialexpress.com/policy/economy-no-plan-to-cut-import-duty-on-wheat-now-official-3649737/
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