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India government raises import duty on wheat to support local farmers![qrcode]()
Apr. 29, 2019
A notification issued by the Ministry of Finance on Friday evening said that wheat import will attract 40 per cent duty from existing 30 per cent effective immediately.
The government in its latest estimates has forecast India’s wheat output at 100 million tonnes, the highest ever, as against 99.12 million tonnes forecast by the Ministry of Agriculture's Second Advance Estimate released in February 2019.
“There has been negligible import of wheat in India during the last financial year due to bumper domestic output. But, there is a fear in the market that wheat demand would pick up especially for animal feed due to the scarcity of fodder in some states. Perhaps, the government must have taken a preventive measure to restrict import and support local wheat farmers,” said Vedika Narvekar, an analyst with Anand Rathi Shares & Stock Brokers.
Data compiled by the Agricultural & Processed Food Products Export Development Authority (Apeda) showed India’s total wheat import at 2700 tonnes worth $0.8 million for the period between April 2018 and January 2019 as against 1.65 million tonnes ($365 million) imported in the financial year 2017-18 and 5.7 million tonnes (worth $1269 million) in the previous year.
Despite negligible import, wheat prices in India have declined by around 13 per cent so far this calendar year and over 8 per cent in April alone following a spurt in arrivals of the new season harvest in spot mandis.
The government’s leading foodgrains procurement agency, the Food Corporation of India (FCI), has continued its aggressive procurement drive despite a huge inventory lying in its godowns across the country. The FCI has so far procured around 5.5 million tonnes of wheat this season. Total stocks of foodgrains in FCI’s central pool are reported at 17 million tonnes for April 2019 versus 15.16 million tonnes for the same month last year.
In a separate decision, the Centre also relaxed norms for wheat procurement for the current season following reports of luster loss due to unseasonal rainfalls. Honouring the request of the Punjab government, the Centre on Friday allowed wheat purchase containing upto 10 per cent kernels of luster lost for the current season.
Source: Business Standard
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