Bumper crop may prompt duty on wheat.

NEW DELHI: The government could impose duty to discourage cheap wheat imports following a bumper crop and overflowing godowns and could also allow export of some varieties of non-basmati rice.

An empowered group of ministers, or EGoM, will take up the issue late next week. The food ministry has proposed an import tax of 40% on wheat.

“We will review in the next EGoM meet on whether or not to impose tax on wheat imports, and will discuss allowing export of some particular varieties of non-basmati rice,” food minister Sharad Pawar said on Friday.

There has been pressure over the last several months on traders from Kerala and Tamil Nadu that the government relax the export ban on matta and ponni varieties, both of which are consumed by expat Indians in the West Asia region and other parts.

The ban on non-basmati rice exports was imposed in April 2008 to cool down food inflation.

Speaking at an award function of the Indian Council of Agricultural Research (ICAR), Mr Pawar indicated that the price of wheat sold in the open market, or open market sale scheme (OMSS), by the government could be slashed further to encourage speedier offtake by states and freeing up of storage space.

A month ago, the EGoM had decided to offload 5 million tonnes of wheat in the open market over the next 10 months to keep food inflation in check.

To ensure the wheat does not remain with bulk consumers at major trading centres only, it also allowed smaller traders to purchase up to 30 tonnes of wheat per month at Rs 12.54 a kg from any FCI depot.

In end June, the country’s food grain stocks stood at 57.85 million tonnes, more than double the requirement for state-run welfare obligations.

India’s wheat harvest in the crop year ended June 30 is estimated at 80.98 million tonnes, compared with 80.68 million tonnes in the previous year.

The decisions on import duty and allowing exports were kept pending on account of apprehensions within the government over the performance of the monsoons this kharif sowing season. The government was keen that the detailed second stage monsoon forecast of the IMD be released before a decision to relax the restrictions was taken.

Source : Economic Times