Wheat Imports : After 6 Years Gap
India, the world’s second-largest wheat producer, plans to begin wheat imports after a six-year gap to replenish depleted reserves and control rising prices, driven by three consecutive years of disappointing crops.
- New Delhi is expected to abandon a 40% tax on wheat imports this year paving the way for private traders and flour millers to buy from producers such as top exporter Russia, albeit in modest volumes.
- India’s wheat production has declined in the last 3 years due to unfavourable weather conditions, leading to a sharp drop in wheat output.
- The government estimates this year’s wheat crop to be 6.25% lower than the previous year’s (2023) record production of 112 million metric tons.
- As of April 2024, wheat stocks in government warehouses have dropped to 7.5 million tons, the lowest in 16 years, due to the government selling over 10 million tons from its reserves to control domestic prices.
- The government’s target for wheat procurement in the year 2024 was 30-32 million metric tons, but it has managed to buy only 26.2 million tons so far.
- Domestic wheat prices have stayed above the government’s minimum support price (MSP) of 2,275 rupees per 100 kg and have been on the rise recently.
- So, the government decided to remove the 40% import duty on wheat to allow private traders and flour millers to import wheat, primarily from Russia.
