India Considers Resuming Wheat Imports To Address Price Concerns

New Delhi, Jun 24 (KNN) The government is contemplating measures to stabilise wheat prices and bolster supplies, including the resumption of wheat imports, according to sources familiar with the matter.

Officials are discussing lowering the current 44 per cent duty on wheat imports, which has effectively halted inbound shipments for the past six years, reported Mint.

This move is being considered alongside other initiatives to manage wheat stocks and prices in the domestic market.

In addition to potential import policy changes, the government is proposing new stock limits on wheat holdings. These restrictions would cap wholesalers at 3,000 tonnes, retailers at 10 tonnes, and introduce adjusted limits for large chain retailers and processors.

Plans are also underway to initiate open market sale scheme (OMSS) operations, with an initial volume of 2.5 million tonnes potentially available from July or August.

These measures come as India, the world's second-largest wheat producer, faces domestic price pressures.

Recent data from the consumer affairs ministry indicates a 6.4 per cent year-on-year increase in the average retail price of wheat, reaching Rs 31 per kilogram.

The government estimates domestic wheat production for the 2024-25 season to be 112.9 million tonnes, comparable to the previous year's output.

Industry experts suggest that if import restrictions are eased, India may import between 1-4 million tonnes of wheat.

The decision to modify import policies is delicate, as it must balance the interests of farmers with the need to ensure adequate domestic supply and price stability.

Traders have been advocating for import norm relaxation to take advantage of current low international prices, particularly due to surplus Russian production.

If implemented, these measures would mark a significant shift in India's wheat trade policy, potentially impacting both domestic and international grain markets.

The government is expected to carefully weigh the implications before finalising any decisions. The proposed actions reflect the government's efforts to manage food inflation and maintain food security, while also considering the complex dynamics of the agricultural sector and international trade relationships.

(KNN Bureau)