Private wheat imports now duty-free
The Centre on Monday allowed duty-free wheat imports by private players to stem rising prices and augment market supplies but traders said high global prices would prevent big purchases.
By Agencies |
NEW DELHI: The Centre on Monday allowed duty-free wheat imports by private players to stem rising prices and augment market supplies but traders said high global prices would prevent big purchases.
“As of today there is no duty on imports of wheat,” food and agriculture minister Sharad Pawar told reporters on the sidelines of a fisheries department meeting. “This facility will be available for the next 4-5 months, maybe until December or January. This decision has been taken already and the orders will be issued shortly,” he said.
The government needs to maintain a buffer stock to ensure adequate supplies for the poor and keep market prices in check. Following a poor crop, the government began buying wheat in March for the first time in six years to augment stocks with the state-run Food Corporation of India which handles the public distribution system.
In June, the government cut the import duty on wheat to 5% from 50% to boost supplies in the local market. Since then private traders have contracted imports of 500,000 to 600,000 tonnes but many firms wanted the duties to be scrapped altogether to boost supplies even more.
Until now, only government-run agencies were allowed duty-free wheat imports. The nil duty will not lead to a flood of imports,” said Mohan Narang, director, KS Commodities, adding “International prices are running very high.” He said traders were awaiting further details on Mr Pawar’s announcement.
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Traders said globally wheat was quoted at about $220 per tonne cost and freight, close to Rs 10,200. Wheat in the Delhi market was trading at about Rs 9,850 per tonne. The announcement had little effect on futures. In early trade, October futures on the National Commodities and Derivatives Exchange were 0.12% lower at Rs 973.60 per quintal. The State Trading Corporation has contracted imports of about 3.8m tonnes of wheat since March. Last week it floated a fresh tender for 1.7m tonnes. Traders said the outcome of the STC tender, bids for which open on Tuesday, would give direction on prices and volumes that were available for sale. The pace of import arrivals contracted by private trade was improving, they said.
Four ships with about 65,000 tonnes of wheat imported by private Indian firms will arrive in Mumbai this month, a senior trade official said. He said another 250,000 tonnes of wheat contracted by private trade was expected in Tuticorin port over the next 45 days. Government officials said six shipments of around 300,000 tonnes of wheat had been received by the FCI by August 27, while another five shipments with about 258,000 tonnes were being discharged at southern ports.
Mr Pawar said it was unlikely the government would have to import more wheat. “Now we are encouraging private sector imports. So I don’t think any more will be necessary, but we are open and if required, we will import,” he said, adding that the measures taken should help overcome the shortage and bring down prices.
Wheat prices have risen more than 30% to about Rs 1,050 per quintal from Rs 800 in the past six months. According to the food ministry, country’s wheat stocks were estimated at 7.3m tonnes on August 1, down from 12.9m tonnes a year ago.
State agencies have procured just 9.2m tonnes of wheat in the current marketing year, against an earlier target of 16.2m, leading to depletion of stocks.
But good rains have raised expectations for the coming crop. “This year, overall monsoon will be helpful for agriculture,” Mr Pawar said, adding “The second spell of rains has substantially improved the situation. It will be helpful for the summer harvested crop.”
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The agriculture minister said the government was trying to boost the acreage of wheat in Bihar, West Bengal, Gujarat and Maharashtra, where the crop is traditionally not grown. This facility will be available for the next 4-5 monthsThe government needs to maintain a buffer stock to ensure adequate supplies. Wheat prices have risen more than 30% to about Rs 1,050/quintal in the past six months.
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