Import duty to be reduced to control wheat inflation during festivals

- Commodity Current - Jayavadan Gandhi

During the monsoon season, the north-western regions of the country are blessed with heavy rains. While in most of the East-South areas, the effect of expected rains is likely to affect Kharif sowing. Groundnut in Gujarat and cereal crop in Punjab-Haryana and turmeric crop in Maharashtra are reported to have suffered significant damage. The influence of monsoon is likely to reduce in August. Cultivation of cereals, telebia, pulses is relatively expected. However, in the kharif season, there is a decline in the sowing of Tuvar, an important pulse. Cultivation has been disrupted in Karnataka, Maharashtra and Gujarat, the main producers of Tuvar. An average decrease of ten percent is seen. Fears of dwindling production of pulses may push up prices in the upcoming festive season.

Inflation in grains wheat and rice is still unbridled. A ban on rice exports has pushed global market prices to a record-breaking 10-year high. With a rise of 50 to 100 dollars per ton, prices have crossed the 600 dollar level. As the rice market becomes uncertain, a wait-and-watch situation has arisen among the traders. India's ban on rice exports has affected China, Malaysia, the Philippines, Indonesia, Gulf and African countries. Measures such as stock limits imposed last month to bring down wheat prices at the domestic level have also failed. However, there is a possibility that the government may reduce the import duty on wheat in the coming days to make available cheap wheat during the festivals. As the wheat production in Russia is good this year, the government can bet to increase the supply of wheat again.

On the other hand, in the spice market, turmeric has caught the boom like cumin. The December futures have crossed the level of Rs 16,000 per quintal, despite the six per cent circuit in turmeric futures for some time now. Turmeric production in Maharashtra, Telangana is less than 30 to 40 percent, heavy rains in Maharashtra have affected the production due to heavy damage to the turmeric plantation, due to which it is debatable that the possibilities of turmeric futures will remain at an all-time high level in the near future. The market is in strong grip with bullishness due to low supply of goods due to continuous increase in domestic as well as foreign demand. Stockists have also become active under these circumstances.

A year or so ago, the cumin market, which was around Rs 250 per kg, has now become a new history by reaching a high level of Rs 650. In the year 2023, Jiru has become a hero in the commodity market. There was a correction in cumin futures last week. But on the last day, due to the increase in demand factor, the futures of Jiru rose and the market rose to the level of 61300 per quintal. In the upcoming festivals from Rakshabandhan to Diwali, there is a strong possibility that the local and foreign demand of cumin will increase and the price will rise to the level of seventy thousand. However, currently the demand for cumin is relatively low. Amid reports of cumin imports from China and Syria, there are reports of 50 percent default on import deals from Syria due to shortage of goods. It is also estimated that the shipment will start next time amid the fact that 250 to 300 container import deals have been done from China. However, Indian cumin prices for Dubai-Middle East countries are 7500 to 8000 dollars per ton and 8200 to 8500 dollars per ton for American and European countries, while Chinese prices are 5500 to 6000 dollars per ton i.e. there is a difference of 1100 dollars in other countries and also in India. There are reports of However, efforts are being made to buy cumin seeds from China at cheap prices and re-export them from India. It is being discussed that there is little chance of Chinese goods coming to India and increasing the supply at the local level if there is no delay due to import duty of 36 percent.