Hopes building over tariff removal

There has been a flurry of speculation that India may scrap the 40 per cent tariff it imposed on wheat imports.

There has been a flurry of speculation that India may scrap the 40 per cent tariff it imposed on wheat imports.

However, those in the grains industry say nothing on paper suggests the move will happen despite Indian wheat supplies being at a seven-year low.

The Indian government reported it had 7.5 million metric tonnes in stores in April.

And since April it is estimated that the Indian government has purchased around 26.2 million tonnes of wheat. India imposed a 30 per cent tariff on wheat imports in May 2018. The tariff was increased to 40 per cent a year later.

News outlet Reuters reported that India was anticipated to drop the wheat tariff after June this year in a bid to replenish its own wheat supplies.

It was estimated India would need to import from 3 million to 5 million tonnes of wheat.

Grains Australia pulse council chairman Peter Wilson visited India in February and said while lifting tariffs on chickpeas until March 31, 2025 was good news, he didn’t think any change for wheat was imminent.

“For India, any lifting of the tariff on wheat would be a fine balance,” he said.

A farmer harvests wheat in the Indian state of Rajasthan. Picture: Himanshu Sharma

However, if it was to occur he said it would be good news for the trade. And the lifting of the chickpea tariff had resulted in instant confidence.

“I was talking to someone in Queensland who was sowing 25,000 acres of chickpeas,” he said.

“Last year they didn’t sow any.”

The current price for chickpeas is $1000 a tonne.

Market Check chief executive Nick Crundall said there was nothing confirmed about a removal of the tariff by India but there had been plenty of speculation.

“I haven’t seen anything official but that is not to say it is not going to happen,” he said.

Mr Crundall said wheat prices had been struggling and ASW delivered to port in Victoria this week was making $355 a tonne to $360 a tonne.

“We are seeing a sliding offshore market,” he said.

Rupanyup farmer and Grain Producers Australia southern director Andrew Weidemann said if the tariff was dropped or reduced it would be good news for growers.

“The tariff has been stopping grain being sold to India,” he said.

Mr Weidemann said there had been speculation around the tariff due to low production in India.

“Any shift in tariffs is always a good sign,” he said.