Govt may impose 10% import duty on wheat

Despite bumper production, miller and traders are importing wheat due to lower global prices and lack of high-quality grains in domestic markets

The government is considering imposing 10 per cent import duty on wheat to curb shipments and liquidate poor quality grains lying in Food Corporation of India (FCI) godowns.

“A final call on this issue would be taken after consultation with the ministries concerned,” a senior government official said.

At present, there is no import duty on wheat.

Flour millers and private raders are importing wheat on lower global prices and lack of high-quality grains in the domestic markets.

Imports are happening despite bumper domestic wheat output in the 2014-15 crop year and surplus stocks with FCI, the nodal agency for procurement and distribution of foodgrains.

"There is a need to restrict overseas purchases, as there is sufficient stock in the country," the official added.

FCI has procured 27.6 million tonnes (mt) of wheat so far in the current marketing year, started from April. “Of which, 20-30 per cent of the grain is of poor quality and that need to be disposed of soon,” the official said.

The corporation had to procure poor quality wheat, as it relaxed norms for procurement of the grain this year to protect farmers, whose crop got damage due to hailstorms and unseasonal rains during February-April.

Amid sluggish supply of high quality wheat, private flour millers have started importing wheat from Australia for the first time in a decade.

They have already contracted for import of 5,00,000 tonnes of wheat from Australia and are planning to purchase another 5,00,000 tonnes from France and Russia.

It is cheaper to import, as landed cost of wheat is about Rs 16 a kg against Rs 17-18 a kg for wheat that is purchased and transported from Madhya Pradesh to Tamil Nadu.

FCI has huge stock of 40 million tonnes of wheat despite drop in production to 90.78 million tonnes in 2014-15 from record 95.85 million tonnes in the 2013-14 crop year.