iGrain India - Coimbatore. At present, the average import cost of Australian wheat at Indian ports is $207 (Rs 24,800) per tonne, wheat from Black Sea region (Russia, Ukraine, Romania etc.) is $275 (Rs 22,963) per tonne and US wheat is $299 (Rs 24,967) per tonne.
This is an indicative cost because currently there is no commercial import of wheat from any country to India.
If the clearing charge for wheat imported from abroad at Indian ports is assumed to be around $14 per tonne, then it will be Rs 1169 per tonne for Australian wheat, Rs 1503 per tonne for Russian wheat and Rs 1169 per tonne for US wheat.
After this, assuming the transportation cost of transporting the imported wheat from the port to the flour mills to be $12 per tonne, it will be Rs 1002 per tonne.
Thus, the total cost of wheat imported from Australia to Indian flour mills is Rs. 26,971 per tonne (Rs. 2697 per quintal), the total cost of Russian wheat is Rs. 25468 per tonne (Rs. 2547 per quintal) and the total cost of American wheat is Rs. 27,138 per tonne (Rs. 2714 per quintal).
For reference, the price of wheat in Coimbatore (Tamil Nadu (NS:TNNP)), located near the ports of South India, is Rs. 2880 per quintal.
Thus, flour millers there can save Rs. 183 per quintal on importing wheat from Australia, Rs. 333 per quintal on importing from Russia and Rs. 166 per quintal on importing from America.
In Tamil Nadu, wheat is imported mainly from Uttar Pradesh, Madhya Pradesh, Maharashtra, Gujarat and sometimes from Bihar and Rajasthan.
The wholesale market price of wheat is high and strong in these states. At present, a hefty 40 percent customs duty is imposed on wheat imports in India, so the actual cost will be very high.
Either the government will have to abolish the import duty or sell wheat from its stock at a discounted price under the Open Market Sale Scheme (OMSS). Only then can there be some stability in the market.