Central government waives off import duty on wheat
The Central government completely scrapped import duty on wheat just a few months after it lowered it to 10%. The decision was taken as there was no relaxation seen in the retail market. The duty has been waived off for an unlimited time frame as no end date has been mentioned. The step has been taken due to uncertain production of wheat due to relatively warmer winters and limited use of fertilizers.
The move has made imports considerably cheaper. Australian wheat has become cheaper by $23 per tonne and Ukrainian wheat has come down by $10 per tonne. This will fuel imports to over 6 million tonnes in 2016-17. This will be highest in the 10 years.
The wheat production as per the government estimates is around 93.50 million tonnes in 2016-17 however many experts have pegged the figures around 90 million tonnes due to year-on-year droughts in 2014 and 2015. The duty waiver will increase imports by almost 1 million tonnes every month. Centre’s own wheat stocks are at an all time low due to less procurement.