Wheat output expected to get damaged by Hailstorm: ASSOCHAM

Wheat output is expected to fall by 13 million tonnes due to damage caused by unseasonal rains accompanied by hailstorms. Due to the damage to the crop, sources close to the govt. revealed that it may have to import the staple grain.

The shortfall in production may lead to a spike in food inflation which may then contribute to price rise, said Assocham General Secretary D S Rawat.

He has pitched for reducing import duty on wheat to a more reasonable level of five to 10 percent so that parallel imports by private trade would ease pressure on government stocks and prices due to better availability.

"The country faces shortfall in wheat production by around 13 million tonnes from the initial estimates of 93.8 million tonnes in the current crop year and the development may force the government to consider imports of the staple grain as well," the paper said.

As far as stocks are concerned, the paper said a drop of 10-20 percent in wheat procurement in the current year will result in around 35-36 million tonnes of wheat stocks as of July first.

While the government can import duty free through its state trading arms, private traders too should be encouraged to import wheat with lower import duty, stated the ASSOCHAM paper.