Global wheat prices took a leap on Friday, climbing 4%, amid news that India, the world's second-largest wheat producer, is contemplating scrapping its hefty import tax on the grain to ensure domestic food supply.
According to insiders referenced by Bloomberg on Friday evening, the Indian government is studying a proposal to eliminate the wheat import duty, aiming to enhance the appeal of purchasing grains overseas. These sources indicated that the government is yet to make a decision, and it remains uncertain whether the proposal will eventually pass.
India, a primary producer of various crops and the world's second-largest wheat producer after China, has long maintained a high tariff of up to 40% on wheat imports. The aim is to protect domestic farmers from the impact of low prices.
If India, the most populous country in the world, starts importing wheat, the obvious outcome would be a further tightening of wheat supplies, already affected by the Russia-Ukraine conflict.
Just two weeks ago, India, in an attempt to control domestic food prices, banned the export of certain rice products, leading Asian rice prices to hit a three-year high.
As of press time, futures market wheat prices had risen by more than 3%, after previously surging by over 4%.
