Even as the government has banned export of wheat for the whole of 2007, it transpires that similar bans or duty free imports in the last several months have not always had the desired impact on prices.
Wheat prices, for instance, have risen by almost 20 per cent in the last one year in spite of the government bringing down the duty on imports to zero in September 2006.
However, with wheat prices in the futures market (Rs 970 a quintal for March delivery) trading at a discount to the spot price of Rs 1,100 a quintal, the market clearly expects the prices to fall once the current rabi crop is harvested and wheat stocks hit the market.
Sugar prices fell almost 25 per cent after the government banned exports in July last year. Prices continued to soften even after the ban was lifted in December, though sugar mills and traders had argued that prices were low on account of the export ban.
In case of edible oils, the government reduced the import duty on January 24. This has brought down retail prices by 5-6 per cent in the spot market.
Last month, the government banned futures trading in urad and tur. Though prices of these two commodities have come down by about 10 per cent, prices of other pulses like chana and masoor continue to rise. In June last year, the government banned export of pulses and allowed duty free imports.
The government also brought down the import duty on maize to zero late last month. However, its prices have shot up since then.
Maize near-month futures have gone up 1.82 per cent to Rs 782 a quintal since the import duty exemption came into effect on January 26. Maize contracts for March delivery, too, have surged to Rs 797 a quintal from Rs 784. In the spot market, prices have risen to Rs 756 a quintal, up 6.18 per cent.
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