Amid conflicting reports about wheat harvest this season, the milling industry has urged the government to cut or abolish import duty on the grain, saying climate uncertainties have increased prices volatility and fuelled speculative trade.
“After the procurement operations are over, ensuring farmers get the right prices, the government should reduce the import duty to nil or keep it less than 10% from the current level of 40%,” Navneet Chitlangia, president, Roller Flour Millers Federation of India said at the sideline of international wheat milling conclave.
This will help the flour millers from south India to import about 2 – 3 million tonne (MT) of wheat and reduce industry’s dependence for the supplies on the government for additioal supplies, Chitlangia said.
In April, 2019, import duty on wheat was increased to 40% from 30% to boost procurement by the government agencies.
Meanwhile food secretary Sanjeev Chopra said while the government has sold 3 MT of wheat under open market sale this fiscal to processors and millers, it “has sufficient stocks of wheat to meet own (public distribution system) requirements and also necessary marketing interventions,”.
At present, Food Corporation of India has 13.82 MT of wheat stock against the buffer of 7.46 MT for April 1. According to industry estimates, the wheat stock is likely to be in the range of 10 – 11 MT at the beginning of the next fiscal year which would be barely above the buffer.
According to the agriculture ministry, wheat output in the 2023-24 crop year (July-June) is estimated at 113.29 MT.
The crop estimate for the 2024-25 crop year is expected to be released soon. Last year, the government had set a target of 115 MT of wheat output for the current crop year.
However, according to processing industry estimates, the wheat production in the current crop year (2024-25) is projected at 110 MT against 105-106 MT in the previous year.
Currently FCI is offloading wheat at a price excluding transportation at a base price of Rs 2,325/quintal, against the current year’s minimum support price (MSP) of Rs 2,275/quintal for the current marketing year (2024-25).
However, traders said because of supply constraints because of low inventories with flour millers, e-auction bid prices of wheat in the last few weeks were in the range of Rs 2700/quintal to Rs 3000/quintal.
Inflation in wheat was 8.8% in January, 2025 on year. Inflation has been in single digit since August, 2023.
Wheat sowing this season has increased to 32 million hectare (Mha) against 31.56 Mha last year and higher than the average sown area of the last five year.
The food ministry has estimated wheat procurement by agencies at 31 MT for the rabi marketing season (April-June) for 2025-26 , which is 26% higher than actual purchase of 26.6 MT in 2024-25 marketing season.
After achieving a record procurement 43.3 MT in 2021-22 season, the purchase by the government agencies under the MSP operations fell to record low of 18.8 MT in 2022-23 season because of lower output. However, it rose by around 40% to 26.2 MT in 2023-24.
The milling industry also urged the government to allow free export of wheat products without advanced authorisation. Currently the government allows import of wheat through pre-authorisation for exports of flours within 180 days of shipment to India while there has been ban on wheat exports since 2022.
(Author is in Goa at the invitation of RFMFI)