‘Govt to consider options including import duty cut if wheat prices do not fall’

Amid concerns that there will not be an immediate reduction in wheat prices, the government has indicated that it could consider reducing tariffs on wheat to allow for imports if prices do not fall to a “comfortable level”.

We are witnessing an inflationary trend in the retail prices of wheat and rice. The government directed us to start the Open Market Selling System (OMSS). Ashok Meena, chairman and managing director of Food Corporation of India (FCI), said the focus is on lowering retail prices. He added that if prices do not fall to a comfortable level, other tools, including reducing import duties, are available to the government. “All options are under study,” he added.

The FCI CMD had hoped that retail prices would begin to fall soon after the measures were announced. At present, the wheat import duty is 40 percent.

As part of the 1.5 million tonnes (metric tons) of wheat to be sold under OMSS in the first tranche as announced on June 12, FCI will launch a tender on Friday for the sale of 0.4 metric tons for which an online auction will be held on June 28. In the first round of rice auction scheduled for July 5, up to 0.5 metric tons will be offered and bidding will be held next week.

stock limits

On June 12, the government imposed restrictions on wheat stocks effective until March 2024 in a bid to check stocking and contain rising prices. However, the portal was only operational on Fridays where traders and others could advertise their stocks of wheat on a weekly basis.

The reserve price for wheat is set at $2,150 per quintal for fair grain and average quality (FAQ) and $2,125 per quintal for comfort specification (URS). The price of rice reserves was set at $3,100 per quintal. Amidst a request for an upward revision in the price of wheat reserves, the Ministry of Food issued on Friday another circular in which it repeated the same prices as announced earlier.

Mina said bidding is also limited to domestic buyers by ensuring that state GST registration is set and checked before stocks are released. To identify real processors and dealers, a valid FSSAI license is also required to participate. However, the FSSAI rule will not be mandatory in the first round of the online auction. Therefore, in the first round of the wheat auction, the mandatory inventory declaration will not be executed.

He said FCI has 8.7 million tons of wheat and 29.2 tons of surplus rice after meeting safeguards and food law compliance that can be used for OMSS if the situation calls for it.

All India Mandi (farm market yard) prices were 2,196/quintal on 15th May, 2,225 on 22nd May, 2,277 on 29th May, 2,307 on 5th June and 2,295 on 12th June and 2,310 rupees on 19th June. .