Will India need to import wheat? Expert weighs in

Ajay Goyal, the Chairman of the Wheat Products Promotion Society, believes that importing wheat may become necessary this year.

The government lacks sufficient wheat stocks to intervene in the market effectively. Current stocks are just enough for buffer and various government programs, but not for significant market intervention, he notes.

Wheat stocks in India’s government warehouses on May 1 were down 10.3% year on year to their lowest since 2008 after two years of low crops prompted the sale of record volumes to boost domestic supplies and lower local prices.

By August or September, if demand outstrips supply, the government might need to reduce import duties from 44% to zero to facilitate imports, Goyal said.

“In 2022, the government estimating a much higher crop actually allowed exports, and then within a month or so, they had to ban exports because on the ground the crop really didn’t seem as large as they were projecting. I think we are again into a hand-to-mouth situation this year,” Goyal said.

Goyal pointed out that both last year and this year, the procurement targets were not met. The target for this year was set at 36 million tonnes, but only around 26 million tonnes were procured.

Ideally, market prices should be about 3-4% lower than the government’s minimum support price (MSP), but they are currently 4-5% higher.

He hinted that a new government might bring policy changes regarding wheat imports.

Tags: stocks, Market, импорт, prices, wheat, India