Steps to ease domestic supplies of wheat soon
The government is considering measures such as reducing import duties and more stringent stock-holding limits for wheat traders to ease domestic supplies.
In addition, the government will continue to sell surplus wheat stock of the Food Corporation of India (FCI) under the open market sale scheme (OMSS) to curb the rise in prices.
“Several steps are under consideration and we are closely monitoring the wheat prices,” a food ministry official told FE. The official said although there has not been a significant jump in wheat prices, to ensure prices remain stable in the coming festive season, import duty cuts could be announced keeping in consideration lower global prices compared to the previous year.
Sources said that major private food companies will be soon writing to the government to reduce the import duty on wheat. In April 2019, India raised the duty to 40% from 30% as domestic prices had dropped, to discourage cheaper wheat imports.
In June this year, the government imposed stock-holding limits for wheat till March 31, 2024, a move previously taken in 2008. As per the notification, the limits for traders or wholesalers have been fixed at 3,000 tonne each, retailers can keep 10 tonne of grain at each retail outlet, and big retailers at 10 tonne per outlet and 3,000 tonne at all their depots.
“We are considering reducing the volume of stock limits for traders and retailers so that more grain enters the market,” an official said.
According to data from the department of consumer affairs, the modal retail wheat prices declined 7% to Rs 26 per kg on Wednesday against the prices prevailing in January.
Meanwhile, FCI has so far sold 0.6 million tonne (MT) of wheat to bulk buyers through weekly e-auctions under the OMSS since June 28. Earlier, the corporation had been selling wheat in the market during the January-March ‘lean’ period.
However, price realised through OMSS has increased from Rs 2,153 per quintal on June 28 to Rs 2,182 per quintal on August 2.
Officials said the government will continue to sell wheat from the FCI surplus stock through weekly e-auctions in the open market till the inflationary trend in cereals prices is curbed.
Wheat stock with FCI in the beginning of the month was 28.32 MT, while the government needs 12.2 MT for the implementation of the National Food Security Act till March 2024. The buffer norm for July 1 is 20.52 MT (wheat).
In a statement earlier this week, Ashwini Kumar Choubey, minister of state for consumer affairs, food and public distribution, said the all-India average retail prices of rice, wheat and atta have recorded an year-on-year increase of 10.5%, 5.2% and 8.5%, respectively.
According to the agriculture ministry, wheat output in the 2022-23 crop year (July-June) increased by 5% to a record 112 million tonne (MT) compared to previous crop year. As per the traders’ estimates, wheat production this year is around 103 MT.
