Wheat Prices Remain Steady to Weak Amid Speculation of Reduced Import Duties

Mumbai, 31 May 2024 (Commoditiescontrol):Wheat prices remained steady to weak across major centers today, influenced by reports suggesting that the Indian government may reduce import duties on wheat from Russia and Ukraine.

According to media reports, India is likely to permit wheat imports at zero customs duty soon after the new government assumes office. However, such imports may come with specific conditions.

The government aims to ensure that ports have sufficient facilities to handle the shipments without significant delays, particularly with the north-east monsoon expected around October. If approved, duty-free shipments could commence in September.

To limit foreign exchange expenditure, the government may auction import permits to the lowest bidders, who might hedge their positions on international markets such as the Chicago Board of Trade or Euronext. Additionally, the government may set an informal or formal price cap for these imports and could require importers to ensure that vessels returning from India carry another commodity to optimize trade.

Historically, global wheat prices tend to rise when India imports wheat. To prevent this, the government is likely to enforce a price cap. Moreover, imports will need to meet stringent phytosanitary conditions, necessitating adequate facilities at the ports.

The imports will also have to meet phyto-sanitary conditions for which port should have the requisite facilities.

Delhi prices traded lower by INR 10 per quintal at INR 2590 per quintal. Rajasthan new wheat traded lower by INR 10 per quintal at INR 2600 per quintal. Bengaluru prices traded steady at INR 2860 per quintal(net) and MP wheat traded down by INR 10 per quintal at INR 2600 per quintal ex warehouse. UP traded steady at INR 2520 per quintal. Uttarakhand traded down by INR 20 per quintal at INR 2530 per quintal. Gujarat traded down by INR 10 per quintal at INR 2610 per quintal. Kolkata traded steady at INR 2720 per quintal.

Government notification is not received yet, and if Gov notification is not received soon, Indian wheat prices may start recovering again.

Despite the absence of an official government notification, some large Indian buyers are already procuring wheat from exporting countries, suggesting a strong likelihood of impending imports. If the government issues the notification, wheat prices in India may decline by INR 50-100 per quintal across major centers.

(By Commoditiescontrol Bureau; +91-9820130172)