The government has started deliberating with stakeholders as it is now apprehensive that the offer of 1.5 million tonnes of wheat sales in the open market may not have the desired impact to curb any price rise. On the other hand, many experts have conveyed the government that removal of import duty of 40 per cent on wheat may help improve domestic availability and check any further price rise.
“Going forward, the government may consider allowing import at zero duty, so that the private sector can import wheat. This may help contain food inflation, especially if the monsoon rains are deficient due to El-Nino,” said Siraj Hussain, a former CMD of Food Corporation of India (FCI) and also a former agriculture secretary.
Also Read: As we have ample stocks, no need for wheat imports now: DGFT
During the stakeholders meeting held late evening Monday, the Food Ministry officials were told by industry representatives that the government would have to increase the reserve price under the open market sale scheme (OMSS) to a realistic level of Rs 2,350/quintal plus freight and simultaneously allow import at zero duty, sources said. As long as the current uniform rate of Rs 2,125/quintal across the country is there, the processors would not import, the sources said.
Besides, the government was also told that the purpose of capping the auction quantity at 100 tonnes per entity will only flare up prices as flour millers will not be able to participate and rather buy at a higher price from the traders who will secure the quantity from the FCI through e-auction.
Also Read: Wheat prices soften, Centre to offload wheat, rice on alternate week in market
“An average of 3,000 tonnes of wheat per month a flour miller needs whereas the government is offering 200 tonnes a month maximum as they have announced one auction every fortnight. The government also very well knows that it is small traders who will participate and supply the grain from FCI to who so ever offers them higher rates. Neither any atta chakki is going to buy through auction, nor millers will participate,” said an industry official, privy to the deliberations.