India is likely to green signal exports of 1 million tonnes of wheat in the first phase.
According to sources in the trade community, India is likely to clear exports of one million tonnes of wheat in the first phase following its decision to restrict shipments of the food grain.
Wheat exports were halted on May 13 by the government in response to rising inflation, but the ban did not apply to shipments made in accordance with contracts for which letters of credit (LCs) had already been established. According to what they said, the clearance for the shipment should be expected under this exemption.
At least half of the quantity will almost certainly be shipped to Bangladesh, the majority of which will take place via rail and road. According to the sources, the decision is going to be announced after the Indian minister of commerce, Piyush Goyal, returns from Davos, where he is currently attending the World Economic Forum.
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According to the sources, the Director-General of Foreign Trade (DGFT) has presented a file to the food ministry after conducting an investigation into the LCs that were issued on or before May 13. It was discovered that many companies had opened back-dated LCs, and the DGFT has weeded out such applications and compiled a list of genuine LCs to be approved by the commerce minister, they added. Back-dated LCs refer to letters of credit that have an expiration date that is in the past.
‘It is learnt that the DGFT has asked for approval of more than 1 million tonnes of export in the first phase against genuine LCs,’ said a wheat exporter who asked not to be identified and who requested anonymity. ‘About 5,00,000-6,00,000 tonnes of which is expected to be for Bangladesh,’ the exporter said.
According to sources in the trade community, more than 250 railway indents had been booked as of the 13th of May for the purpose of shipping wheat to Bangladesh. These can carry approximately 6,00,000 tonnes of wheat, which is equivalent to 2,450 tonnes per rake. In addition, as of the 13th of May, when the ban was announced, ten railway rakes that were loaded with grain have been left stranded.
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It is anticipated that approximately 200,000 tonnes of wheat will be exported via road, while the remaining quantity may be transported via vessel, including to other locations.
According to traders, Bangladesh was not in a rush to import Indian wheat because the country only had a limited amount of storage space. An exporter based in Kolkata stated that in order for Bangladesh to make space in its warehouses for wheat imports, the country would first need to sell the rice that is currently stored there.
At this very moment, Chittagong port in Bangladesh is the location of Bangladesh’s unloading of a shipment that originated in Australia.
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