Women walk through a wheat field on their way to cast their votes at a polling station in Amroha, UP, India. File photo/Reuters
India has raised its import duty on wheat to 40 per cent from 30 per cent, the government said late on Friday, as the world’s No.2 producer of the grain tries to support local farmers.
The step comes as Prime Minister Narendra Modi’s party looks to contain rural discontent due to lower crop prices amid voting in a general election that began on April 11 and ends on May 19.
Local wheat prices have fallen over 11 per cent in 2019 due to ample supply from last year’s crop and forecasts of record output. The hike in duty is likely to make imports of wheat unviable for flour mills even after recent declines in global prices , potentially dragging further on global grain markets.
“Local wheat production is higher. The government is now trying to ensure prices remain above support levels,” said Harish Galipelli, head of commodities and currencies at Inditrade Derivatives & Commodities in Mumbai.
India has raised the price at which it buys new-season wheat from local farmers by 6 per cent to 1,840 rupees per 100 kg for 2019.
The government usually purchases about a quarter of such wheat from farmers at state-set prices to build stocks to run a major food welfare programme.
India’s wheat production will rise 2 per cent in 2019 from the year before to a record 99.12 million tonnes, according to estimates from the country’s agriculture department.
Only one wheat crop is grown in India each year, with planting starting in late October and harvesting in March.
Government wheat stocks stood at 17 million tonnes as of April 1, up nearly 30 per cent from the same time a year ago.
“At 40 per cent import duty, imports are not viable for flour mills. They have to buy local crop,” said a Mumbai-based grain dealer with a global trading firm. He declined to be identified as he was not authorised to speak with media.
Indian flour millers imported 1.65 million tonnes of wheat in the 2017/18 fiscal year, down from 5.7 million tonnes the year before. Those shipments were mainly from Australia, Russia and Ukraine.
The Election Commission on Saturday banned the online streaming of the web series 'Modi: Journey of a Common Man', stating that no biopic material which can disturb the level-playing field during the Lok Sabha elections can be displayed.
Congress President Rahul Gandhi on Saturday appealed to Prime Minister Narendra Modi to address at least one press conference before the elections conclude saying it was looking terrible on international level.
Congress President Rahul Gandhi on Wednesday slammed Prime Minister Narendra Modi for being the “most anti-national” and accused him of “dividing the nation.”
London's benchmark FTSE 100 index was up 1.0 per cent, in the eurozone, Frankfurt won 0.9 per cent and Paris climbed 0.8 per cent.
Spot gold was up 0.8% at $2,033.86 per ounce by 0655 GMT, after hitting a record high of $2,036.49. US gold futures rose 1.4% to $2,049.30.
The benchmark Nikkei 225 index slipped 0.26 per cent, or 58.81 points, to end at 22,514.85, while the broader Topix index inched down 0.04 per cent, or 0.55 points, to 1,554.71.
Brent crude was up by 31 cents, or 0.7%, at $44.74 a barrel by 0713 GMT. The contract rose 0.6% on Wednesday to its highest close since March 6. West Texas Intermediate oil was up by 26 cents, or 0.6%, at $41.96 a barrel. The contract ended Tuesday trading 1.7% higher, its highest close since late July.