Grain imports: India tariff hike shock

INDIA has doubled its tariff on wheat imports and slapped a 50 per cent tariff on field pea imports, which has concerned the Australian industry.
The Australian grain industry also fears lentils or chick peas, which are highly lucrative to Australian farmers, might be targeted next.
The Indian Government announced last week it would increase the current 10 per cent import tariff on wheat to 20 per cent.
It comes as new Australian Bureau of Statistics data revealed India was the second largest importer of Australian wheat for the year to September 30.
India bought more than 2.24 million tonnes of Australian wheat last season, setting a new record for exports to the populous nation.
CBH Group’s marketing and trading general manager Jason Craig said India was looking for wheat of an Australian Premium White type, and most wheat shipped to India was from the east coast of Australia.
He said the increase in tariffs on wheat would have an impact on trade flows of grain.
“The increase in tariffs will result in a slowing of imports,” he said.
“We are seeing more grain being withheld on the east coast (of Australia).
“So our shipments to India will be influenced by a combination of supply and the effect of the import tax.”
In addition, a 50 per cent tariff was also slapped on yellow pea imports.
According to Pulse Australia data for the year to the end of October this year, 220,000 tonnes of yellow peas were exported from Australia and 130,000 tonnes of this went to India.
Pulse Australia executive officer Nick Goddard said clarification was being sought from the Indian Government about when the tariff would be applied, given there were shipments of peas in transit.
Mr Goddard said India was sitting on “a mound of stocks” and the Indian Government “needed to manage support prices for their farmers”.
“We know why it happening, but it’s the speed ... and lack of notification that is a concern,” he said.
ProFarmer issued a special market alert last week after the announcement, and said “there is also speculation a tariff may be placed on chick peas or lentils in the near future,” but there has been nothing official from the Indian Government.
ProFarmer data over the 2015-16 and 2016-17 seasons, show chick pea exports from Australia to India were 686,000 tonnes and 1.44 million tonnes respectively.

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