India bans wheat exports amid sharp rise in domestic prices

As part of its effort to curb local price surge, the Narendra Modi government has banned wheat export with immediate effect. India, being the second largest wheat producer, took the decision following decadal high in wheat prices in April. On Friday, government data showed annual consumer price inflation hitting a near eight-year-high of 7.79 per cent in April and retail food inflation surging even higher to 8.38 per cent




“The export policy of wheat is prohibited with immediate effect ,” the notification issued by Directorate General of Foreign Trade (DGFT) said.

“in order to manage the overall food security of the country and to support the needs of the neighbouring and other vulnerable countries”.

It also clarified that wheat exports will be allowed on the basis of permission granted by the Government of India to other countries to meet their food security needs and based on the request of their governments. In a separate notification, the DGFT announced the easing of export conditions for onion seeds.

India’s wheat exports surged to 7 million tonnes, worth USD 2.05 billion, in 2021-22 due to strong global demand. Of the total wheat exports, around 50 per cent of shipments were exported to Bangladesh in the last fiscal, according to the DGFT data.

The country exported around 963,000 tonnes of wheat this year against 130,000 tonnes in the same period last year.

India was looking to export 10 million tonnes of wheat in 2022-23. The commerce ministry recently stated that India would send trade delegations to nine countries – Morocco, Tunisia, Indonesia, the Philippines, Thailand, Vietnam, Turkey, Algeria and Lebanon – to explore possibilities of boosting wheat shipments.

India’s wheat purchase have also declined sharply by 44 per cent to 16.2 million tonnes as of May 1 in the current Rabi marketing season due to heavy lifting by private traders and low arrivals in Punjab and Haryana.

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The government had procured 28.8 million tonnes of wheat in the year-ago period. The rabi marketing season runs from April to March.

Private players have bought wheat at a price higher than the minimum support price amid increased demand for the grain for export.

The Centre has set a target to procure a record 44.4 million tonnes of wheat in the 2022-23 marketing year as against an all-time high of 43.34 million tonnes in the previous marketing year.

Amid lower purchase for the central pool, the Centre has stopped the sale of wheat under the Open Market Sale Scheme (OMSS) to bulk consumers and asked them not to wait for recommencement of the scheme for buying the grain.

Wheat production is pegged at a record 111.32 million tonnes in the 2021-22 crop year (July-June), as per the second advance estimate of the agriculture ministry.
(with agency inputs)