Russia-Ukraine conflict: India’s wheat exports expected to exceed 10mt this fiscal year – USDA
According to the US Department of Agriculture (USDA), India will export a record 10 million tonnes (mt) of wheat during the current fiscal year, but rice shipments may be lower this calendar year, and corn (maize) sales abroad may also be lower during the season to September.
According to the USDA’s Foreign Agricultural Service’s ‘Grain: World Markets and Trade’ report, India’s wheat exports this fiscal will be 10 million tonnes, up from 3.58 million tonnes last fiscal. In the case of rice, exports would be 20.5 million tonnes, up from 21.19 million tonnes the previous year.
Corn exports would be lower for the present marketing season (October 2021-September 2022), at 2.8 million tonnes (MT), compared to 3.67 million tonnes last season. However, due to the conflict between Russia and Ukraine, which has halted shipments from the Black Sea region, the USDA has raised export projections for rice and corn by 0.5 mt and 0.3 mt, respectively, in the present situation compared to previous years.
‘Demand is increasing’
The USDA increased its wheat export forecast for India by 3.0 million tonnes due to increased demand following Russia’s invasion of Ukraine. ‘In the new marketing year 2022-23, which begins in April, fresh supplies will be available in addition to the country’s exceptionally large stocks,’ it said.
While New Delhi typically supplied wheat to neighboring countries such as Bangladesh in addition to West Asia, India also found buyers in Africa and other parts of the Gulf countries. Transit time to West Asia will be longer than for Black Sea exporters, but ‘India is well-positioned to step in as a low-cost supplier,’ according to the USDA.
387% growth from April to January
Between July 2021 and January 2022, Exports reached 5.2 million tonnes, the majority of which went to Bangladesh. Since October, exports have averaged more than 0.9 million tonnes per month, and India is expected to maintain this pace, according to the report.
According to the Commerce Ministry statement issued on Monday, the value of wheat exports increased 387 percent during the April-January period of the current fiscal year to $1.74 billion, up from $358 million the previous year.
According to data from the Agricultural and Processed Food Products Export Development Authority (APEDA), the volume of wheat shipments increased to 5.04 mt from 1.07 mt in the previous fiscal year from April to December of this year.
‘Despite the Ukraine conflict, tightening global supplies and high prices from main exports have made Indian wheat competitive for the first time in several years. India has ample exportable supplies after five consecutive record crops and rising government wheat inventories,’ it said.
According to the US agency, Indian wheat export prices averaged an ‘attractive $312/tonne’ in January, benefiting from low freight rates to markets in West and South Asia.
While Indian wheat export prices are currently hovering around $350, grain prices in the United States, Argentina, and Europe are all quoted above $425. Surprisingly, the last time India shipped a record volume of wheat, Russia and Ukraine faced a supply shortage due to a drought-ravaged crop.
United States also benefits
Russia and Ukraine would have been the top and third-largest wheat exporters this year, according to ING Think, the economic and financial analysis arm of the Dutch multinational financial services firm ING.
The Russian-Ukraine conflict has also benefited the United States, as bidding prices for wheat have risen sharply between $160 and $190 per tonne. The USDA said this month that it had increased its projections for Indian rice exports by 0.5 million tonnes due to a ‘very large crop, high stocks, and competitive prices.’ It estimated India’s production at 129 mt, up from 124.37 mt last year.
Record increases in rice and corn output
Rice production is expected to reach a record high of 127.93 million tonnes this crop year, according to the Union Ministry for Agriculture and Farmers’ Welfare. The Food Corporation of India had 26.33 mt of rice and 49.26 mt of paddy (31.35 mt of rice) as of February 1, compared to 24.36 mt of rice and 34.5 mt of paddy (22 mt of rice) the previous year.
According to the Commerce Ministry, rice exports totaled $7.7 billion in the first ten months of the fiscal year (up 13%. As per APEDA data from April to December, rice exports totaled 12.53 million tonnes, up from 8.25 million tonnes the previous year.
Because of India’s record corn crop, the USDA has increased its forecast for cereal exports to 2.8 million tonnes (MT) from 2.5 million tonnes (MT) a month ago for the current season through September. According to the US agency, India’s corn crop this crop year to June will be 32.5 mt, up from 31.65 mt last crop year.
The Agriculture Ministry estimates cereal production at 32.42 million tonnes. APEDA According to April-December statistics, exports of other cereals, which include corn as the main item, increased to 2.74 million tonnes valued at $747 million from 1.97 million tonnes valued at $434 million.