India Could Scrap Wheat Import Duty to Cool Domestic Prices

• India could scrap a 40% duty on wheat imports and cap the amount of stocks traders can hold to try to dampen record high domestic prices in the world's second-biggest producer, government and trade officials told Reuters on Monday, August 8, 2022.
• Late in the day, the trade ministry said it would restrict the export of some wheat-derived products like finely milled "maida" and semolina from Aug. 14, with only an inter-ministerial committee allowed to clear their shipment. Exports of the items are generally small.
• India barred wheat exports in May after the crop suffered a heatwave, but domestic prices still rose to a record high, and yet still, international prices are way above the domestic market, making it unviable for traders to buy from abroad.
• If the government does remove the duty, and international prices also fall, then traders say they could start importing, especially during the upcoming festival season, when higher demand typically drives domestic prices higher.
• Domestic wheat prices ended last week at a record 24,000 rupees ($301.57) per tonne, having risen 14% from lows struck after the government surprised markets on May 14 by banning exports, ending hopes that India could fill the market gap left by missing Ukraine grain. Domestic prices are still nearly a third lower than global prices, said a Mumbai-based trader with a global trading firm, who described Indian wheat as the cheapest in the world.

(Source: Reuters)