Wheat import duty may be doubled

NEW DELHI: The government is likely to raise the import duty on wheat to 40 per cent from 20 per cent to protect local farmers from cheap imports, food ministry officials said.

According to industry executives, wheat imported from Ukraine and Russia is available for about Rs 22,300 a tonne after payment of 20 per cent duty and clearing charges.

This is offering stiff competition to the variety grown in Madhya Pradesh which is selling for Rs 22,800 a tonne in Bengaluru. On the other hand, premium wheat from Australia, which is available for Rs 24,300 a tonne, has steady clients in southern India.

As per the government’s third advance estimate, the country is set to produce a record 98.61 million tonnes of wheat in 2017-18 crop year.

Cheap imports in this scenario could hit Indian farmers hard, the officials cited earlier told ET on Tuesday.

“An inter-ministerial committee meeting, headed by the food secretary, last week discussed the matter on raising the import duty on wheat. In all likelihood, the notification will come any time soon,” one of the officials said.

The secretaries and officials of the ministries of food, consumer affairs, agriculture, finance and commerce were present at the meeting.

Another official said that with wheat harvesting nearing its close, the government is considering the proposal to double import duty. “There is a huge crop in the country and the government will ensure that farmers get remunerative prices,” he said. In 2017-18, India imported 1.48 million tonnes of wheat compared with 5.75 million tonnes of wheat in 2016-17. Traders said no imports have taken place since April this year, but the industry is following a wait-and-watch policy.

The Food Corporation of India (FCI) and other state agencies have procured 33.3 million tonnes of wheat till date in the ongoing procurement season. FCI also has a carryover stock of 13 million tonnes. “The government has enough stock against requirement of 30 million tonnes for the various welfare schemes and for the minimum buffer,” said a trader.

A Chennai-based commodity broker said that if duty is increased, millers in south India, who are aggressive buyers of wheat from Ukraine, Australia and Russia, are unlikely to go for imports. “The increase in import duty will force millers to increase domestic buying, which may increase prices,” he said.

swadehi --snip