CANBERRA: Drought like situation and rising demand in global markets will make India import wheat much higher than in past many years. India may have to import about 2 to 5 million tonnes of wheat in financial year 2016-17, said industry officials. This could perhaps be the highest in wheat imports that the country has seen since 2006-07. Industry officials estimate the wheat crop will be 85 million tonnes in the FY17 a drop of 2.3% compared to last fiscal’s around 87 million tonne production. India levies a 25% import tax on wheat.
Analysts believe that higher domestic prices may trigger the government to remove the 25% tax on wheat imports. “We are expecting wheat imports to be around 2 million tonnes. In current situation large quantity of imports would only materialise when import parity sets in, that will happen only if Indian wheat prices go up drastically or global prices crash,” said Prerna Desai, vice president for research at Edelweiss Agri Services & Credit. Since April, Edelweiss estimates suggest wheat prices in India have gone up by 9%.
Several officials from wheat processing companies we contacted estimated wheat import at 5 million tonnes. “At some point the government has to take a call on the import duty. The government has taken care of farmers by raising support price. Now it’s time to think about consumers,” said S Sivakumar, group head- ITC, Agri & IT Business at the sidelines of Global Grain, Food & Feed Summit 2016.
According to a report by Reuters, Indian flour mills have signed deals to import wheat from Australia and France. Traders estimated government’s procurement at about 22.8 million tonnes so far against a target of 30 million tonnes.
