India to boost wheat exports to fill vacuum left by Ukraine conflict
Supply disruptions due to the war between Russia and Ukraine, known as Europe’s breadbasket, have sparked panic among wheat-importing countries.
These countries are rushing to secure their supplies in a context of scarcity and high prices.
India is also pursuing wheat importing countries that have not traditionally relied on Indian wheat such as Turkey, Azerbaijan, Sudan, Morocco, Tunisia and Lebanon.
Russia and Ukraine export almost a third of the world’s wheat each year.
The Indian government is also considering measures to boost exports, including addressing logistics bottlenecks related to ports and railways and ensuring that products meet global quality standards.
The Ministry of Commerce is in discussions with the railways and port authorities to meet the immediate demand for additional transport of wheat.
“Countries like Egypt, Israel, Oman, Nigeria and South Africa have already applied for wheat from India,” one of the government officials quoted above said, under cover of anonymity.
“The government is working closely with Indian Railways and Port Authorities to facilitate the process.”
While India is the second largest wheat producer with a share of around 14.14% of global production in 2020, it accounted for less than 1% of global wheat exports. In 2020-2021, India entered new wheat markets such as Yemen, Afghanistan, Qatar and Indonesia.
India is in final talks to start wheat exports to Egypt, one of the biggest wheat importers from Ukraine and Russia, the Ministry of Commerce and Industry said on Saturday.
Questions emailed to the Department of Trade and Industry spokesperson on Sunday were not answered immediately.
India plans to export nearly 10 million tonnes of wheat in FY23 to meet supply shortfalls resulting from the Russian-Ukrainian conflict. India has so far exported 6.6 million tonnes of wheat in 2021-22, triple the 2.15 million tonnes exported in 2020-21.
Efforts are underway to verify that substandard quality is not exported so that India remains a long-term exporter to these countries. The Department of Agriculture, Cooperation and Farmer Welfare could conduct pest risk analysis and then accept market access applications, the first official quoted above said.
However, government officials have pointed out that high freight rates and a shortage of shipping containers could set back India’s attempts to increase exports.
These issues, if left unaddressed, could limit Indian wheat exports to nearly 8 million tonnes in FY23, below the estimated 10 million tonnes in the best-case scenario.
India’s wheat export share has increased from 0.14% in 2016 to 0.54% in 2020. India produces about 107.59 million tonnes of wheat annually, a large portion of which is destined for domestic consumption. According to the Ministry of Commerce, India’s wheat exports are mainly destined for neighboring countries, with Bangladesh holding the largest share of over 54% by volume and value in 2020-21.
The second official said that some WTO standards that prohibit exports of products purchased at the minimum support price (MSP) can also hinder exports. Also, the Ministry of Merchant Marine will have to ensure the availability of containers in accordance with the requirements of exporters.
Experts said several political calls need to be made to ease wheat exports, and a prolonged escalation of tensions between Russia and Ukraine could mean that net food-importing countries will be pushed to the wall. This, in turn, would make them look to big wheat producers like India.
Madan Sabnavis, Chief Economist, Bank of Baroda, said India should iron out a number of policy-related hurdles to access the market which it has been unable to do in the past, adding that India has enough wheat stocks to cool down wheat prices.
India has never been a major exporter of wheat, but in the past two years the country has been able to export large quantities of wheat, said Biswajit Dhar, Professor, Center for Economic Studies and Planning, School of social sciences, JNU.
According to the Directorate General of Trade Intelligence and Statistics, the top 10 importing countries of Indian wheat in 2020-21 were Bangladesh, Nepal, UAE, Sri Lanka, Yemen, Afghanistan, Qatar, India. Indonesia, Oman and Malaysia.
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