 "Wheat imports may rise to 5 mn tonnes in 2016-17")
A drought-like situation and rising demand in global markets could force India to import two to five million tonnes of wheat in 2016-17, industry sources said.
This could be the highest wheat imports since 2006-07.
Industry sources estimate the 2016-17 wheat crop will be 85 million tonnes, 2.3 per cent less than 87 million tonnes a year ago. Analysts said higher domestic prices could force the government to remove the tax on wheat imports. India levies a 25 per cent import tax on wheat.
“We are expecting wheat imports to be around 2 million tonnes. Large imports will only materialise when import parity sets in--if Indian wheat prices rise drastically or global prices crash,” said Prerna Desai, vice-president for research at Edelweiss Agri Services & Credit. Edelweiss estimates wheat prices in India have climbed 9 per cent since April.
Several executives at wheat processing companies estimated wheat imports 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 the support price. Now it is time to think about consumers,” said S Sivakumar, group head, agriculture and infotech, ITC, on the sidelines of the 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 the government's procurement at 22.8 million tonnes so far against a target of 30 million tonnes.
Officials have indicated the wheat import duty will be reviewed by the end of June and removed if needed. In that case, wheat imports are likely to touch 5 million tonnes, say industry executives.This could be the highest wheat imports since 2006-07.
Industry sources estimate the 2016-17 wheat crop will be 85 million tonnes, 2.3 per cent less than 87 million tonnes a year ago. Analysts said higher domestic prices could force the government to remove the tax on wheat imports. India levies a 25 per cent import tax on wheat.
“We are expecting wheat imports to be around 2 million tonnes. Large imports will only materialise when import parity sets in--if Indian wheat prices rise drastically or global prices crash,” said Prerna Desai, vice-president for research at Edelweiss Agri Services & Credit. Edelweiss estimates wheat prices in India have climbed 9 per cent since April.
Several executives at wheat processing companies estimated wheat imports 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 the support price. Now it is time to think about consumers,” said S Sivakumar, group head, agriculture and infotech, ITC, on the sidelines of the 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 the government's procurement at 22.8 million tonnes so far against a target of 30 million tonnes.
Sivakumar also said the shortfall or rising prices would not impact ITC’s procurement strategy. “Prices will impact everyone but efforts like our e-choupal allow us to be relatively cushioned,” he added.
“For instance, if we see the price of a particular quality of wheat is going up we will figure out a variety that is closest to it and use it,” he said.
ITC is collaborating with the Indian Agricultural Research Institute, Directorate of Wheat Research, Punjab Agricultural University, and the Agharkar Research Institute. As part of its wheat crop development programme, ITC has introduced location-specific seed varieties in over 50,000 acres in Rajasthan, Uttar Pradesh, Bihar, West Bengal, Madhya Pradesh, Maharashtra and Karnataka.
ITC’s wheat exports grew to 700,000 tonnes in 2015-16 from 500,000 tonnes in the previous year.