Govt scraps wheat import duty to boost supply

TO IMPROVE the supply of wheat, the government on Thursday removed a 10 per cent import duty on the grain. Earlier, in September, the wheat import duty was brought down to 10 per cent from 20 per cent.

According to sources, the move is aimed at ensuring that retail wheat prices, which have seen an increase in the last few weeks, are kept under check till the new crop arrives in the market from April 1, 2017.

Around 2 million tonne (mt) of wheat from Ukraine and Australia has been imported by private players in the current financial year.

Traders say that with the abolition of import duty, another 3 mt of wheat is expected to be imported in the current financial year.

Traders say that currently, the global price of wheat is around $235 per tonne, which is below the domestic prices.

However, the government is expected to review the import duty structure by March or April, 2017, once the new crop would start arriving in the market.

It’s noteworthy that the government has abolished the import duty despite higher domestic production of 93.50 mt in the 2015-16 crop year (July-june) compared with 86 mt reported in the previous year.

Traders disagree with the wheat output figure put out by the agriculture ministry, stating that the actual grain output in 2015-16 was around 88-90 mt.

“The government has stated that wheat sowing is more than last year and even previous years’ average sowing in spite of demonetisation. Imports are counter-productive to the Make in India campaign,” Ajay Vir Jhakar, chairman, Bharat Krishak Samaj said. FE