Export Wheat

Despite ban on exports, Indian wheat prices rose to a record high

Despite ban on exports, Indian wheat prices rose to a record high

Despite a ban on exports, Indian wheat prices rose to a record high, owing to huge demand and diminishing supply from a crop damaged by a heatwave.

The price increase has diminished the likelihood of India exporting significant volumes of wheat through government-to-government agreements with countries trying to secure exports due to the disruption caused by Ukraine’s war.

‘The majority of farmers have sold their crop. Despite the fact that demand is high, there are few available supplies’ Gopaldas Agarwal, a trader headquartered in Indore, central India, stated.

Also Read | Wheat prices rise in international markets due to India’s ban on exports, Russian war: FAO.

On Wednesday, local wheat prices reached a new high of 23,547 rupees per tonne. This was up roughly 12% from recent lows following the government’s surprise export ban on May 14.

According to a Mumbai-based trader with a global trading organization, supplies in grain markets were substantially lower this year than normal, indicating that 2022 production had declined far more than the government had predicted.

‘The government’s estimate of 106.41 million tonnes is far from accurate. Supplies indicate a production of roughly 95 million tonnes’ He stated.

The Foreign Agricultural Service of the United States Department of Agriculture estimates production at 99 million tonnes.

In 2021, India, the world’s second-largest wheat producer, harvested 109.59 million tonnes. Because of a heatwave in March and April, the government predicted lower output this year.

Lower supplies are evident in government wheat procurement, which is down 57 percent this year compared to the same period in 2021, at 18.8 million tonnes.

According to a New Delhi-based dealer with a global trading firm, the government will have a limited stockpile to influence the market until new-season supplies become available in March 2023.

‘Supplies are running low. India may authorize small-scale exports to Sri Lanka or Nepal, but large-scale shipments are unlikely under government-to-government agreements’ explained the dealer

Also Read | China backed India at WTO agriculture conference on the wheat export ban.

When New Delhi prohibited wheat exports, it stated that it would permit abroad shipments to countries that requested supply ‘to address their food security needs.’

In the second quarter, India exported 3.5 million tonnes of wheat, primarily to Bangladesh, Nepal, Indonesia, the Philippines, and Sri Lanka, up from 1.1 million tonnes the previous year.

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