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Australia expects India to lower its wheat import duty later in 2025 to control high domestic prices. Australian officials see a potential market opening as India’s wheat production is forecasted at 115-116.4 million tonnes. However, below-normal rainfall may impact yields, with some traders predicting output below 110 million tonnes. Current wheat prices remain above the Minimum Support Price (MSP) despite government interventions like open market sales. FCI wheat stocks are 22% higher than last year, but rapid sales could reduce them significantly before the new procurement season. Australian trade representatives are optimistic about gaining market access, while discussions on trade agreements and non-tariff barriers continue.

Key Highlights

* Australia expects India to lower wheat import duty in 2025.

* India’s wheat production forecast is 115-116.4 million tonnes.

* Below-normal rainfall raises concerns of a lower wheat crop.

* Wheat prices remain above MSP despite market interventions.

* Australian wheat may gain market share amid potential import duty cuts.

India’s wheat prices remain high despite the government’s efforts to stabilize the market. The current weighted average price at APMC yards is Rs 2,879 per quintal, significantly above the MSP of Rs 2,425 per quintal. Although prices have declined by Rs 125 this month, concerns remain about procurement levels for the central buffer stock. The Food Corporation of India (FCI) has been releasing wheat through open market sales, contributing to a temporary price drop.

Supporting the high price trend, India’s wheat production is forecasted at 115-116.4 million tonnes. However, lower-than-expected rainfall may impact output, with some traders estimating production below 110 million tonnes. The India Meteorological Department (IMD) reported deficient rainfall in major wheat-growing regions, further adding to supply concerns. FCI’s wheat stocks, currently 22% higher than last year, may drop significantly as weekly sales continue.

Amid these developments, Australia anticipates a major opportunity to export wheat to India. Australian officials believe a potential import duty cut, currently at 44%, could open doors for Australian wheat, especially for milling purposes. Australia is also negotiating the Comprehensive Economic Cooperation Agreement (CECA) with India, aiming for favorable trade terms. Meanwhile, discussions continue on addressing India’s stringent non-tariff barriers, such as zero tolerance for weed seeds.

Finally

India’s wheat market remains volatile, with price trends and production uncertainties driving policy decisions. If an import duty cut is implemented, Australian wheat could play a significant role in India’s supply chain.

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