Measure likely to result in revenue of R90 crore to the government
The government on Friday imposed 10% import duty on wheat till March 2016 to curb imports and liquidate poor quality grain procured by the FCI and state agencies under relaxed quality standards.
Finance minister Arun Jaitley placed the relevant notification before the Lok Sabha, which states that the measure would result in revenue of Rs 90 crore to the government in the remaining part of the current fiscal.
In the recently concluded rabi marketing season, the Food Corporation of India (FCI) procured 28.08 million tonne of wheat from farmers, out of which 26.62 million tonne have been purchased under the relaxed quality norms as the crop got damaged due to unseasonal rains.
At present, there is no import duty on wheat and private traders, especially those in Tamil Nadu, have been importing wheat due to lower global price and lack of availability of quality grains in the domestic markets. Food ministry sources said that traders in southern India have contracted for import of five lakh tonne of wheat from Australia recently.
Export prices of Australian wheat are ruling at around $260 per tonne, cheaper than locally available grain, making it attractive for flour millers in southern India. According to ministry of consumer affairs data, the retail prices of wheat on Friday was ruling at Rs 32 per kg and Rs 19 per kg in Chennai and Delhi, respectively.
As per the International Grain Council data, the exports price of wheat from the United States was $217 per tonne on Thursday while the domestic minimum support price offered to farmers during recently concluded rabi marketing season was Rs 1,450 per quintal.
Food minister Ram Vilas Paswan had last month suggested that a 10% import duty on wheat be imposed since there is surplus stock.
The government is keen to sell off the wheat on a priority basis, which was procured under the relaxed quality norms, through public distribution system and through Open Market Sale Scheme (OMSS).
In case of wheat, FCI has a grain stock of 38.6 million tonne on July 1 while the buffer norm stipulates only 27.5 million tonne of grain to be held with the government agencies.
The country’s wheat production is estimated to have declined to 90.78 million tonne in 2014-15, as against the record production of 95.85 million tonne during 2013-14.