Wheat Processors Call for Removal of Import Duty to Ease Supply Shortage

The wheat processing industry is urging the removal of the 40% import duty on wheat to address the shortage in the local market. With government procurement falling behind targets and carry-forward stocks at a 16-year low, industry representatives argue that eliminating the duty would facilitate imports, bolster buffer stocks, and stabilize wheat prices. International wheat prices have surged by over 15% in the last 10 days, making it financially viable for mills to import wheat if the duty is removed.

The wheat processing industry has demanded the removal of the 40% import duty on the food grain to improve supplies in the local market, as the government’s procurement is lagging behind targets and carry-forward stock at the beginning of the fiscal year is at the lowest point in 16 years.

Rising Prices and Industry Impact

International wheat prices have increased by over 15% in the last 10 days. Industry representatives believe that removing the 40% import duty would make it feasible for mills, particularly in South India, to import wheat. “If we remove the 40% import duty, it would become feasible for some mills in South India to import wheat,” said Chitlangia, a representative from the wheat processing sector.

Rohit Khaitan, a wheat processor from Raniganj in West Bengal, emphasized the urgency of the situation. “Wheat prices in the domestic market have increased by 4% during the last fortnight. We are unable to pass on this rise in wheat prices by increasing atta prices as the demand is less by about 20-25% due to the prevailing economic conditions,” Khaitan explained.

Stabilizing the Market

Industry representatives argue that removing the import duty is essential to stabilizing the wheat market. By facilitating imports, the government can ensure a steady supply of wheat, preventing further price hikes and potential shortages. This measure would also help maintain buffer stocks at adequate levels, ensuring food security and price stability.

The call for the removal of the import duty comes at a critical time when the wheat processing industry is facing significant challenges. The combination of rising international prices, low domestic stocks, and reduced procurement has created a perfect storm, threatening the stability of the wheat supply chain.