Wheat: India lowers tariff to 0 harvest estimate wishful thinking

India has abolished import duties today well the last 10% for wheat. Inventories were reduced because of the drought in the last two years, and prices rose. Traders estimate that the wheat imports times higher, since ten years no longer.
Last month rise to a record high wheat prices in India, which is why now import tariffs for wheat for an indefinite period be abolished completely. Traders expect that India must lead up to five million tons of wheat this marketing year that ends on March 31. That would be the greatest amount since 2006/07 as 6.7 million tons were imported.
Then come to an offer from the own Indian harvest in April. So until then the prices don't go up and remains the inflation under control, now comes the end of import duties. Private companies had bought this season already two million tons of wheat mainly from Australia and the Ukraine. Australian wheat costs less than the local production in the South of the subcontinent 235 USD/tonne and to approximately 20%.
The Customs reduction can be because traders doubt whether agree the crop estimates of the Government in New Delhi. In the last two years, the harvest was less than in the year 2013/14 and the State supplies had to be attacked. The cut in the tariff comes after the Government took measures against the shadow economy in the last month has drawn large banknotes. Thus, 86% of all bar transactions were disputed. The farmers complained that they had problems obtaining resources such as fertilizer and seed.
Of Agriculture estimated wheat production by 2015/16 to 93.5 million tons, considerably more than the 86,53 million tons in the previous year. Market participants expect but that it was substantially less. The crop estimate was wishful thinking.

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