Government today decided to further extend 25 per cent import duty on wheat to curb inward shipments as domestic output is estimated to have gone up by nine per cent despite drought.
As per the Agriculture Ministry's third advance estimate, wheat output has risen to 94.05 million tonnes in the 2015-16 crop year (July-June) from 86.53 million tonnes in the previous year.
"25 per cent import duty on wheat has been continued further," Food Minister Ram Vilas Paswan said in a tweet.
A notification in this regard will be issued soon.
In view of rising prices of wheat and wheat flour, the Food Ministry had discussed with the Finance Ministry the option of scrapping the import duty on the commodity to boost local supply.
However, the government has maintained the import duty at 25 per cent in view of higher production estimates.
On the other side, private traders -- who have so far imported 5 lakh tonnes of wheat from Australia and France -- expect that the government may eventually reduce the import duty when the final production estimates are revised.
They expect about 10 per cent drop in wheat production due to severe drought. "The government wants to watch the situation and reduce the duty later. The agenda now for them is to control food inflation. There is shortfall in domestic output and the government may remove duty," a trader said.
Wheat procurement so far is down at 23 million tonnes compared with 28 million tones in the year-ago period despite higher output.
In March, the government had extended the import duty on wheat by another three months, till June, to curb imports as domestic production is estimated to rise this year.
Last year too, private millers had purchased about 5 lakh tonnes of wheat from Australia for the first time in a decade due to sluggish supply of domestic high protein wheat and lower international prices.
As on April 1, state-owned FCI had a stock of 30 million tonnes of wheat, much higher than the actual requirement of 7.46 million tonnes.
