Govt may consider reducing import duty on wheat to curb rising prices, says FCI Chairman

Karam Prakash

New Delhi, June 23

India may consider, if need be, to reduce import duty on wheat to control retail prices in the country. Talking to The Tribune, Ashok Kumar Meena, chairman and managing director, Food Corporation of India (FCI), said government’s intention was to control retail prices at any cost, therefore, all the measures would be considered including reducing import duty.

“We have already imposed a stock limit on wheat storage, and now we are starting the Open Market Sale Scheme. And if these measures don’t cool down prices, we will definitely consider reducing import duty on wheat to scale down prices,” said the FCI chairman.

Currently, there is 40 percent import duty on wheat.

FCI would start to offload wheat and rice in Open Market Sale Scheme (OMSS) as a step to bring down rising prices.

The e-auction of wheat would start from June 28 while auctions for rice would kick off from July 1. In this OMSS(D), the quantity that a bidder can purchase in a single bid range from 10 to 100 MTs. During the earlier sale, the maximum quantity allowed was 3000 MT per bid for a buyer.

“The quantities have been reduced this time to accommodate more small and marginal buyers and to ensure a wider reach of the scheme. This is believed to facilitate the release of the stocks sold under OMSS(D) to reach the general public immediately,” said Meena.

Significantly, this is for the first time FCI would release rice to private buyer through e-auction.

The reserve price of wheat has been fixed at Rs 2,150 per quintal for fair and average quality and Rs 2,125 per quintal for under relaxed specifications (URS). As for rice, base price has been fixed at Rs 3,100 per quintal.

In order to control the hoarding of wheat, the government has decided that the declaration in Wheat Stock Monitoring System portal was mandatory for participation in the auctions. In addition to this, the valid FSSAI license is also made mandatory for participation in order to identify the genuine processors and traders.

The maximum quantity, that a buyer can bid for, is limited to 100 MTs in this c-auction while the minimum quantity has been kept to 10 MTs. Further, to accommodate the small and marginal traders and processors of wheat, the EMD for participation in the e-auctions has also been reduced by 50% from the earlier levels. The bidding was also limited to the local buyers by ensuring that the GST registration of the state is mapped and checked before stocks are released. These measures are taken to ensure a wider local reach for the stocks offered in a particular state.

FCI chairman claimed that six weekly e-auctions of wheat were conducted by the Food Corporation of India until March 15. “Total quantity of 33.7 LMT wheat was offloaded and the prices of wheat has already come down by 19% due to this massive intervention in a span of 45 days. Due to the Rabi procurement period of wheat, the market intervention had to be suspended,” said FCI chairman.