The central government on Sunday ruled out any move to import wheat and said there is enough wheat stock to meet domestic demand as well as for public distribution. The government last week estimated wheat production to have decreased almost 3% to 106.84 million tonnes (MT) in the 2021-22 crop year (July-June).
The drop in wheat products is assigned to the hot wave between March and June that hit the crop in the northern states of Punjab and Haryana. This eventually forced the government to a reduction on wheat export in May to hold on to domestic supplies steady. Of course, trade sources evaluate that the actual wheat output could have been below 100 MT. The United States Department of Agriculture (USDA) had projected India’s wheat production at 99 MT.
Consumption in wheat stocks is allotted to a more than 56% drop in accession in the current winter crop season to only 18.8 MT against 43 MT purchased by FCI and agencies in the 2021-22 season (April-June) because of lower production and the free ration scheme being executed since May 2020.
Wheat inflation rise by 11.66% in July 2022. Prices at key mandis all over the country are presently ruling around 14%-19% above the minimum support price (MSP) of `2,015 a quintal for the current winter crop season (2022-23), as traders are holding on to stocks in the expectation of a further rise in prices in the increase to the festival season, industry sources said.
Though, a duty cut may not be very effective in the present context to cool local prices as domestic prices are much cheaper than the current global prices. Besides removing the import duty, the Central government is also looking at imposing stockholding limits on wheat and voluntary disclosure of wheat stocks held by stockists, traders, and millers. In April 2019, India hiked the import duty on wheat to 40% from 30%, as domestic prices had declined, to dispirited low-cost wheat imports.