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Flour mills to continue importing wheat from Australia despite 25% duty |
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NEW DELHI: Local flour mills are expected to sign more contracts to source wheat from Australia despite them paying a 25% import duty, as demand for better quality grains in India is on the rise, said industry executives.
India, the second largest producer of the food grain, is estimated to have imported 5.2 lakh tonnes of wheat in the year ended March 31, 2016, compared with 52,000 tonnes the year before, the Roller Flour Millers' Federation of India said. The jump has been driven by requirement from makers of niche bakery, pasta and noodle products.
"Millers who want quality products are importing. Flour mills and traders have imported 50,000 tonnes of wheat in the month of March and another 70,000 tonnes have been contracted," said VK Bansal, president of the federation.
India is expected to produce 92-93 million tonnes this year. Bansal said the Indian crop is good compared to the previous year when it was damaged due to rains. This means imports are unlikely to be as high as 2015-16, but will be substantially more than 2014-15.
Mills require 20 million tonnes of wheat a year to manufacture maida, suji, flour and bran, he said. "We are watching on how much wheat is procured by Food Corporation of India and then will make our next move."
According to traders and millers, Australian wheat is preferred because it is segregated according to protein content in the grain and the quality of gluten. This helps during the production of bakery products, they said.
"Consumers in Tamil Nadu, Karnataka and Kerala are paying higher for quality Australian wheat. The high quality flour is in high demand mainly for making 'parantha' and bread," said KS Kamalakannan, managing director of Naga Flour Mills in Tamil Nadu. The company is one of the largest importers of wheat in the country.
"The imported wheat currently at 25% import duty from Australia is costing approximately Rs 21,000 per tonnes versus domestic wheat at Rs 19,600. Millers are majorly buying domestic wheat as of now," said Rajiv Yadav, vice president (grains and oilseeds) at Noble Natural Resources India.
A trader said millers want the government to reduce the duty immediately after the procurement of FCI is over. "Looking at current crop, we feel FCI might end up buying only 25-26 million tonnes," he said.
FCI has a target to procure 30 million tonnes in this season.
The import duty on wheat is aimed at protecting local farmers from cheap overseas grain.
Source : economictimes.indiatimes.com
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