New Delhi: Rising wholesale and consumer prices of wheat may prompt India to allow imports of the staple food item in a few months. If India becomes an importer, it will be a huge reversal — from desire To ‘feed the world’ in summer to grapple with winter shortages.
When India exported about 7.2 million tonnes of wheat as compared to the previous year (2021-22), the export is Estimated The target is to have 6 million tonnes by the end of the current financial year (2022-23).
India announces export ban in May This year to ensure domestic availability of food grains and to check food inflation.
But data from the Ministry of Consumer Affairs, Food and Public Distribution shows Wheat prices are skyrocketing. Average retail and wholesale wheat flour as on 6th August (Flour) Prices for the country as a whole were up 14 percent and 19 percent, respectively, year-on-year.
Retail wheat flour prices were 21 per cent higher in Delhi, 29 per cent higher in Mumbai and 46 per cent higher in Kolkata on August 5 as compared to the previous year.
In contrast, international wheat prices have declined by 14.5 per cent. july (month-to-month), partly because of the agreement between Russia and Ukraine to unblock ports in the Black Sea region to allow Ukraine’s grain exports.
Traders said India may allow import of wheat due to softening of international prices and rise in domestic prices.
The government stock of wheat is only slightly more than what is required for food subsidy schemes and strategic reserves. As of July 22, India had 27.8 million tonnes of wheat in the public stock against the stocking norm of 27.6 million tonnes. their current stock. are on lowest in 14 years.
The government says that the wheat situation is under control.
ThePrint reached out to Food Secretary Sudhanshu Pandey via call and email, but did not get revert. This report will be updated upon receipt of feedback.
“Public procurement (of wheat) this year was less than in previous years, but we have sufficient stock of rice and wheat. If the prices cross a threshold then we can intervene… We are following the situation closely. We are monitoring and will take steps in national interest if required,” Food Secretary Sudhanshu Pandey was Told in an interview CNBC Voice Last week.
Former agriculture secretary, Siraj Hussain, told ThePrint that retail wheat flour (atta) prices have increased by more than 20 per cent in major metros. “No government can be comfortable with such a sharp increase in the prices of a staple grain, especially when there is a shortage of rain in the major rice producing states,” he said.
Hussain, former managing director of Food Corporation of India (FCI), said, “If prices rise further, there is every possibility that import duty on wheat will be abolished.”
The risk of rice production in the current Kharif crop season has further worsened the situation in wheat.
Due to less rainfall and less planting in states such as Uttar Pradesh, Bihar, West Bengal and Jharkhand, India’s rice production may be low. drop Around 10 million tonnes in 2022-23.
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disputed conjecture
Sandeep Bansal, a wheat flour mill owner in Uttar Pradesh, the largest wheat producing state, said that before the ban was announced, the prices of bulk mill-quality wheat rose from Rs 2,200 per quintal in April to around Rs 2,500 per quintal in early August. Went.
Bansal said these prices could reach Rs 2,800 to Rs 3,000 per quintal by October-November, forcing the government to announce steps like reducing import duty and stock limits on traders.
At present, India imposes 40 per cent duty on wheat imports.
Whether or not India will need to import wheat depends on assessment production is correct.
In February, the agriculture ministry had estimated the 2022 wheat crop to be a record 111 million tonnes. In April, as a severe heat wave led to a drop in yields in major producing states, the ministry lowered the production estimate to 106.4 million tonnes. lowest in three years.
Foreign Agricultural Service of the United States Department of Agriculture Estimated The crop size in India in May will be 99 million tonnes.
However, traders and mill owners say that the actual crop may be much less in the range of 90-95 million tonnes.
“The current wheat prices are not supporting the production estimate of the government. The actual number could be somewhere closer to 90 million tonnes. Shortage of supply is the reason behind the supply-demand imbalance and the current high prices,” said Dhaval Meghpara, Director Gujarat based Vanraj Besan and Roller Floor Mill.
Meghpara said that despite the recent fall in global wheat prices, international wheat prices are higher than domestic prices.
“But if the government does not act, domestic prices will rise when demand picks up in the festive season of Diwali. What the government needs to do is plan and reveal a strategy for the market and not create sudden frenzy,” he said.
A Delhi-based trader said on condition of anonymity that wheat imports “will come at a price”.
“Last year, India exported wheat at an average price of USD 275 per tonne and this year it may import at prices above USD 400 per tonne,” the trader said. It is likely that the domestic wholesale wheat prices will touch Rs 3,000. per quintal till November”.
“A lot will depend on whether the government extends the free food scheme (Pradhan Mantri Garib Kalyan Anna Yojana) beyond September and whether it relaxes the stocking norms and open up (from its stock) to cool the prices. sells in the market.”
(Edited by Amritansh Arora)
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