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.


Aramco profits fall in tough quarter, but sees partial recovery from COVID-19 impact

Updated 09 August 2020

Aramco profits fall in tough quarter, but sees partial recovery from COVID-19 impact

  • Aramco see’s “partial recovery” from pandemic impact
  • Aramco president says company remains resilient

DUBAI: Saudi Aramco, the world’s biggest oil company, reported a net income of $6.57bn for the second quarter of 2020, the period which witnessed the most volatile oil market conditions for many decades.

The result, announced to the Tadawul stock exchange in Riyadh where the shares are listed, compared with income of $24.7 bn last year.

Amin Nasser, president and chief executive, said: “Despite COVID-19 bringing the world to a standstill, Aramco kept going. We have proven our financial resilience and operational reliability, setting a record in our business operations, while at the same time taking steps to ensure the health and safety of our people.”

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Aramco’s dividend - a big attraction for the investors who bought into the world’s biggest initial public offering last year - will remain as pledged, Nasser added. Cash flow in the quarter amounted to $6.106 bn.

““Strong headwinds from reduced demand and lower oil prices are reflected in our second quarter results. Yet we delivered solid earnings because of our low production costs, unique scale, agile workforce, and unrivalled financial and operational strength. This helped us deliver on our plan to maintain a second quarter dividend of $18.75 billion to be paid in the third quarter,” he said.

Aramco said the loss was “mainly reflecting the impact of lower crude oil prices and declining refining and chemicals margins, partly offset by a decrease in production royalties resulting from lower crude oil prices and a decrease in the royalty rate from 20 per cent to 15 per cent, lower income taxes and zakat as a result of lower earnings, and higher other income related to sales for gas products.”

Sales and revenue in the period - which saw oil prices collapse on “Black Monday” in April - fell 57 per cent to $32.861 bn from the comparable period last year. 

Nasser said he was cautiously optimistic that the world economy was slowly recovering from the depths of the pandemic lockdowns.

“We are seeing a partial recovery in the energy market as countries around the world take steps to ease restrictions and reboot their economies. Meanwhile, we continue to place people’s safety first and have adapted to the new normal, implementing wide-ranging precautions to limit the spread of COVID-19 wherever we operate.

“We are determined to emerge from the pandemic stronger and will continue making progress on our long-term strategic journey, through ongoing investments in our business – which has one of the lowest upstream carbon footprints in the world,” he added.

Aramco expects capital expenditure to be at the lower end of the $25bn to $30bn range it has already indicated for this year.