Amid rising wheat prices, the government is considering all options, including lowering the import duty or abolishing it altogether to contain the price, Food Secretary Sanjeev Chopra said on Friday, as per a Reuters report. Notably, in June, the government imposed a limit on the amount of wheat stocks traders can hold to bring down prices. It has also directed state governments to ensure compliance with stock limit orders and ensure disclosure of stocks.
However, the retail prices of wheat increased in July. As per the data provided by the government, the average retail price of wheat in January was Rs 31.58 per kg, which decreased to Rs 28.74 per kg in May. However, it has risen again to Rs 29.59 per kg in July.
"We have options like lowering or abolishing the wheat import duty and tweaking the stock holding limits to control prices. The options are under consideration," the top official for the Ministry of Consumer Affairs, Food & Public Distribution told reporters on Friday.
During the 2021-22 crop year (July-June), the country's wheat production declined to 107.74 million tonnes compared to 109.59 million tonnes in the previous year. This reduction was attributed to heat waves in some of the wheat-growing states. Consequently, the government's wheat procurement also dropped significantly, decreasing to 19 million tonnes during that period, compared to around 43 million tonnes in the previous year.
However, there is a positive outlook for the 2022-23 crop year, with wheat production estimated to increase to 112.74 million tonnes.
However, a trade body told the news agency in June that India's wheat harvest for 2023 was at least 10 per cent lower than the government's official estimate. The report further said that despite the record production, the discrepancy between the government's data and the trade body's observations has contributed to market uncertainties and price fluctuations in the wheat industry.
Wheat prices in New Delhi have surged by 12 per cent in the last 4 months, reaching Rs 25,174 per metric tonne, the highest level in nearly six months, the report said.
In an effort to increase domestic availability and control rising wheat prices in retail markets, the government imposed a ban on wheat exports last year. To further regulate the prices of wheat and wheat flour (atta), the government has been selling wheat stocks from the central pool to various stakeholders in the open market.
The Open Market Sale Scheme (OMSS) has been implemented, through which the government plans to release 15 lakh tonnes of wheat to flour millers, private traders, bulk buyers, and manufacturers of wheat products until March 2024. This move is aimed at keeping a check on wheat prices and ensuring sufficient supply in the market.
As per the report, Food Secretary Sanjeev Chopra also clarified that there is no plan to import wheat from Russia or engage in a government-to-government deal.
The government has also banned the shipment of broken rice and non-basmati white rice in order to check the domestic price. However, the option of a government-to-government deal is still open. As per PTI, Chopra has that so far only Bhutan has requested Rice supply.
The average retail price of rice climbed to Rs 40.82 per kg in July from Rs 38.09 per kg in January, as per the government data.
