India hikes wheat import duty to support local farmers

Local wheat prices have fallen over 11 percent in 2019 due to ample supply from last year’s crop and forecasts of record output. (AFP)
Updated 27 April 2019

India hikes wheat import duty to support local farmers

  • It comes as Prime Minister Narendra Modi’s party looks to contain rural discontent due to lower crop prices
  • India’s wheat production will rise 2 percent in 2019 from the year before to a record 99.12 million tons, according to estimates

MUMBAI: India has raised its import duty on wheat to 40 percent from 30 percent, the government said late on Friday, as the world’s No. 2 producer of the grain tries to support local farmers.
The step comes as Prime Minister Narendra Modi’s party looks to contain rural discontent due to lower crop prices amid voting in a general election that began on April 11 and ends on May 19.
Local wheat prices have fallen over 11 percent in 2019 due to ample supply from last year’s crop and forecasts of record output. The hike in duty is likely to make imports of wheat unviable for flour mills even after recent declines in global prices , potentially dragging further on global grain markets.
“Local wheat production is higher. The government is now trying to ensure prices remain above support levels,” said Harish Galipelli, head of commodities and currencies at Inditrade Derivatives & Commodities in Mumbai.
India has raised the price at which it buys new-season wheat from local farmers by 6 percent to 1,840 rupees per 100 kg for 2019.
The government usually purchases about a quarter of such wheat from farmers at state-set prices to build stocks to run a major food welfare program.
India’s wheat production will rise 2 percent in 2019 from the year before to a record 99.12 million tons, according to estimates from the country’s agriculture department.
Only one wheat crop is grown in India each year, with planting starting in late October and harvesting in March.
Government wheat stocks stood at 17 million tons as of April 1, up nearly 30 percent from the same time a year ago.
“At 40 percent import duty, imports are not viable for flour mills. They have to buy local crop,” said a Mumbai-based grain dealer with a global trading firm. He declined to be identified as he was not authorized to speak with media.
Indian flour millers imported 1.65 million tons of wheat in the 2017/18 fiscal year, down from 5.7 million tons the year before. Those shipments were mainly from Australia, Russia and Ukraine.


UAE to impose 50% tax on soft drinks in health drive

Updated 21 August 2019

UAE to impose 50% tax on soft drinks in health drive

  • The 50% tax on soft drinks and 100% on vaping products start Jan. 1, 2020
  • The government says the taxes are necessary to help persuade people to make healthier choices

DUBAI: The UAE government has announced new taxes of up to 100 percent aimed at vaping and soft drinks, in a bid to reduce the consumption of unhealthy products.

Starting Jan. 1, 2020, the new list of taxable products will include sugary and sweetened soft drinks, as well as powders that can be used to make drinks, and electronic smoking devices.

A statement on state-run news agency WAM said the step is aimed at reducing “consumption of unhealthy goods and modifying consumers’ behavior.”

The Cabinet decision, will add a 50 percent tax on soft drinks with added sugar, in form of a liquid, concentrate, powders, extracts or any product that may be converted into a drink.

Vaping devices and the associated products will be taxed at 100%. (File/Shutterstock)

“The decision also requires manufacturers to clearly identify the sugar content in order for consumers to make sensible healthy choices,” the statement read.

The cabinet also announced the introduction of a 100 percent tax on electronic smoking devices - irrespective of whether they contain nicotine or tobacco - and the liquids used in the devices.

The UAE government first introduced a tax on specific goods deemed harmful to human health in 2017.