Crop quality concerns to spur wheat imports

Discussion in 'Politics & Society' started by sasi, Apr 6, 2015.

  1. sasi

    sasi Senior Member Senior Member

    Nov 18, 2012
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    Millers expect to ship in 5-8 lakh tonnes this year
    Flour millers in the South are considering importing wheat from Australia to meet their requirements as they fear damage to this year’s crop from untimely rain, which has affected maturing grain in the North.
    Millers are keeping a close watch on the weather pattern in North and market arrivals.
    If the wheat is severely damaged and the cloudy weather in the key producing states continues, imports could range between five to eight lakh tonnes this year against the 25,000-30,000 tonnes last year.
    Protein rich
    Millers in South have traditionally imported the high protein wheat in smaller quantities, mainly in containers, from countries such as Australia for blending with the local variety to produce bakery maida and flour used to makeparathas.
    Australian wheat contains 10.5 per cent protein. Indian wheat’s protein content of around 9.5 per cent, trade sources said.
    “Wheat imports should go up this year, as there are quality concerns due to rains affecting the crop across North India,” said MV Balasubramaniam, Managing Director, Narasu's Sarathy Enterprises Pvt Ltd, a miller in South. Narasu’s imported wheat in smaller quantities last year.
    Import preference
    “Wheat in India is not separated based on the protein content and millers do not have the technical capacity or mechanism to differentiate the cereal based on the content. Rain-affected wheat turns soft and the quality of the end produce – flour or maida – may get affected if not blended with the high protein wheat,” a miller said. As a result, millers prefer to go in for imports. It has been reported that some millers in South have already contracted about 80,000 tonnes of wheat from Australia to be delivered in May-June.
    Wheat does not attract any import duty, but shipments into the country have to meet the phyto-sanitary requirements.
    “We will wait for a few days to take a call. The fall in international prices has offered a window for imports,” said MK Dattaraj, Managing Director of the Bengaluru-based Krishna Flour Mills.
    Dattaraj, who recently toured wheat growing areas of Madhya Pradesh, said the bulk of wheat arrivals are yet to come. “Of the 20 per cent of the produce that has come to the market, there has been some quality damage. About 80 per cent of the wheat is yet to come to the market,” he said.
    Millers are worried about the availability of the quality and not necessarily the quantity.
    The landed price for the Australian wheat is around $301 at Tuticorin Port. After adding up the inland freight and handling charges, the mill delivered price is around ₹19,900 a tonne. At the same time, the mill delivered price for the Madhya Pradesh wheat in South India is about ₹17200, including the freight and handling charges, sources said.
    Another Bengaluru-based miller, Pramod Kumar, Executive Director, Sunil Agro Foods, said he would wait till April-end to decide on imports. “It all depends on how severe the crop has been impacted in Rajasthan,” he said.
    Wet spell
    The wet spell in recent days has hit the harvest and the quality of the cereal across the wheat producing regions, right from Maharashtra, Gujarat, Madhya Pradesh, Rajasthan, Haryana, Punjab and even Uttar Pradesh.
    The latest spell has raising the prospect of triggering the fungal disease such as black point, thereby affecting the quality of the produce. Also, rain has pushed back the harvest by about a week to late April. According to Agriculture Ministry, extensive damage to the wheat crop was reported in UP (21.18 lakh hectares), Rajasthan (17.04 lh), Punjab (2.6 lh), Madhya Pradesh (2.4 lh), Himachal Pradesh (1.5 lh), and Jammu & Kashmir (0.60 lh).
    Wheat stocks in the Central pool as on March 1 stood at 19.52 million tonnes, over twice the buffer and strategic reserve norm for the period.

    why no import duty on wheat?

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