August 30, 2023

Indian industry leader urges removal of wheat import tax to stabilise local prices

In a bid to address escalating wheat prices in India, Pramod Kumar S, president of the Roller Flour Millers' Federation, has urged the government to eliminate the existing 40% import tax on wheat to facilitate grain imports, India Today reported.

India, a key player in wheat production, has undertaken various measures to counteract surging wheat prices, such as restricting traders' stockpiles and releasing state-reserved grain to fulfil the demands of bulk consumers.

Wholesale prices of wheat in India have surged by approximately 11% over the span of the past four months, culminating in a seven-month peak witnessed in August.

Kumar said that abolishing the import duty will allow millers and private traders potentially importing 2 to 3 million metric tonnes of wheat. The deficit, particularly evident in southern states like Kerala and Tamil Nadu, is exacerbated by transportation expenses from regions where wheat cultivation is predominant.

He said that the removal of the import duty could stimulate immediate imports of Black Sea wheat, subsequently alleviating supply shortfalls until the forthcoming harvest season.

Kumar estimated that the procurement of Black Sea wheat could transpire at a cost of US$280 to US$290 per tonne, encompassing pertinent expenses such as insurance and freight. This projection positions Black Sea wheat as nearly US$40 more economical in comparison to supplies from other major wheat-producing regions.

The depletion in wheat supply has ensued from a reduced crop size. Notably, Kumar previously communicated to the news agency that the wheat harvest in 2023 registered a decline of at least 10%, as compared to the government's record projection of 112.74 million metric tonnes.

-      India Today