India exports wheat worth $650 million in March-April after announcing ban

The Centre announced on May 25 that India had sold wheat worth $177 million in March and $473 million in April. While India's expected wheat production for 2022-23 remains around 105 million metric tonnes (MMT), it must meet domestic consumption needs for its 130 million people (30 MMT required for food security schemes such as the National Food Security Act (NFSA), Pradhan Mantri Garib Kalyan Anna Yojana (PMJKAY), and other welfare schemes for nearly 80 million poor and vulnerable people), while also providing humanitarian assistance. In FY 2021-22, the government disbursed 42.7 MMT of wheat through the NFSA and PMGKAY programmes, according to the government.

According to ANI sources, the government's wheat procurement has plummeted by 53% so far in the 2022-23 marketing year compared to the previous year due to aggressive export buying by private operators.

"Among the wheat exporting countries, India ranked 19th in 2020, 35th in 2019, 36th in 2018, 36th in 2017, 37th in 2016, which shows that India has an insignificant share (0.47 per cent) while seven countries (Russia, the USA, Canada, France, Ukraine, Australia, Argentina) have the largest share in the overall quantity of wheat export in the past five years. A negotiation-based approach instead of conflict would have prevented removal of nearly a quarter of wheat exports from Russia and Ukraine," the data read.

It further read, "Still, after the conflict began on February 24, 2022, India has exported wheat worth $177 million and $473 million in March 2022 and April 2022 respectively despite facing challenges of low wheat production as a result of an extreme heat wave that enveloped the northern part of the country that caused shrivelled grains and resulted in drop in yield per acre."

The government data on May 25 further mentioned that the export restrictions had been a regular feature of major food producers which has adversely affected India too. On the other hand, India has taken the step towards the regulation of wheat exports in order to ensure food security of India, its neighbours and vulnerable countries.

On the front of restrictions on wheat, there are at least eight countries (excluding India) such as Egypt, Turkey, Kazakhstan, Kyrgyzstan, Kuwait, Kosovo, Ukraine, Belarus etc which have exercised export restrictions on wheat that are still in force. Egypt and Turkey have also been importing a significant quantity of wheat from India and have no locus standi for asking for open exports after having restricted them.

In the past few months some other countries such as Argentina and Hungary banned wheat exports, but they now have moved away from those restrictions. Russia removed export duties but due to a trade embargo by Western countries, it is not able to export, the government said.

Additionally, the export of a variety of other food goods has been banned. Indonesia (palm oil), Argentina, Kazakhstan, Cameroon, Kuwait, and others have imposed vegetable oil limitations. Despite accounting for roughly a third of all vegetable oil exports (palm oil accounts for nearly 60% of global vegetable oil shipments), Indonesia's decision to ban palm oil exports had a significant impact on countries (such as Bangladesh, Pakistan, and India) that relied heavily on Indonesia to meet their domestic requirements. These have resulted in considerable price increases, with India bearing the brunt of them.

The procurement of wheat in Rabi Market Season (RMS) 2022-23 has been 180 lakh metric tonnes (LMT) compared to 400 LMT last year in RMS 2021-22 (i.e. 45 per cent). This is due to the fact that the farmer got a better price than MSP in the open market, as confirmed by market survey reports and field offices, even without visiting the Mandi at most places. This is also evident from the fact that procurement on May 16, 2022 and May 17, 2022 has been merely 31,349 MT and 27,876 MT respectively compared to 3,80,200 MT and 1,46,782 MT respectively in the previous year on the same days (i.e. only 8.2 per cent and 19 per cent).

Further, the 180 LMT procurement in RMS 2022-23 has been also due to the relaxation in Fair Average Quality (FAQ) norms of shrivelled grains of wheat (from 6 per cent to 18 per cent) by the Central Government. This has facilitated the farmer to sell the produce at MSP to the government which was otherwise selling in an open market at a lesser price, thus safeguarding the financial security of farmers.

(With agency inputs)