India to Maintain Wheat Import Duty Amid Inflation Concerns

India has decided not to scrap import duty imposed on the wheat, a top government official said. However, they will limit the amount of wheat, allowed to be held by traders and millers. The government will also ensure sufficient domestic supplies to address inflation concerns.

Traders, wholesalers and big retailers will be permitted to hold only 2,000 tons of wheat against 3,000 tons allowed earlier, said Sanjeev Chopra, the most senior civil servant at the Ministry of Consumer Affairs, Food and Public Distribution. Government has also decided to release more wheat stocks into open market in order to curb inflation. The country is looking to ease supply side problems during the festival season.

“There”s adequate availability of wheat, rice and sugar in the country but some unscrupulous elements are trying to take advantage of rumors about supplies,” Chopra said.

India has already banned wheat and non-basmati white rice exports in order to ensure domestic availability in the wake of inflation pressures. The Indian government has also imposed a cap on sugar exports.

Chopra said recent export curbs have helped India ensure adequate availability of staples such as rice, wheat and sugar.

“Despite sufficient stocks, a sense of artificial shortage is being created in the country,” he said.

“The government is fully prepared to meet festival demands for rice, wheat and sugar,” Chopra said.

He said the country”s sugar inventory stood at 8.5 million tons in August, sufficient to fulfil the requirement of more than three and half months.

“There were some concerns about the sugar cane crop due to inadequate rains in August, but September rains in Maharashtra and Karnataka have helped the crop,” he said, referring to India”s top cane-growing states.

Being the largest rice exporter, India”s export curbs on parboiled and basmati had rattled the world rice market as the cost of the rice became exorbitant.