New Delhi: Pre-existing orders, effects of the Russo-Ukraine War, and demands from countries that did not buy wheat from India earlier , According to sources in the Ministry of Commerce and Industry, this is the reason why wheat exports have increased despite the ban.
According to commerce ministry data, India’s wheat exports doubled between April and August this year as compared to the same period last year. Central government had imposed ban on export of wheat To control rising domestic prices in May.
A commerce ministry official said, “From above it looks contradictory, but there are two reasons for the increase in wheat exports over last year. “First of all, there were pre-existing contracts before the ban on export of wheat in May. Second, these contracts are of a different capacity.”
The wheat export ban came after India’s retail inflation hit an 8-year high of 7.79 per cent in April. The scorching heat in April-May had also damaged the country’s wheat crop, reducing yields.
However, the ban on export of wheat not implemented For consignments registered before May 13 and for requests made by other countries to the Government of India to meet their food security demands.
According to the data available on the website of the Ministry of Commerce, Indian wheat exports stood at 43.5 lakh metric tonnes (MT) during the April-August period this year. This was double of 20.07 lakh metric tonnes exported in the same period last year.
Even between June and August – the period immediately after the export ban – wheat export figures were higher than in 2021 – 17.98 lakh metric tonnes this year, compared to 13.54 lakh metric tonnes in 2021.
According to the ministry’s website, India has exported to only a handful of countries in the months since the ban – 11 countries in June, five in July and eight in August. India exported wheat to 33 countries in June, 34 in July and 33 in August in 2021.
India was a minor player in the global wheat market last year, but emerged as a major player this year, as the Russo-Ukraine war created a “global supply crunch”, spurring demand from countries that have bought Indian wheat. Wheat was not bought. past, said the official quoted earlier.
Ukraine and Russia see upswing among top global producers of wheat falls In export of grain since the war began in February.
“So now you can imagine that if we had not imposed restrictions. “Our exports would have grown exponentially,” the commerce ministry official said.
Demand has increased especially from East Asian countries.
For example, South Korea – which had not imported Indian wheat in the past, according to commerce ministry data six years — has been one of the top buyers this year so far, importing 5.04 lakh metric tonnes of Indian wheat between April and August alone.
However, while India continues to export to most of the neighbors facing food security concerns, consignments to Nepal have fallen over the last year.
Growing demand, especially from East Asia
According to ministry data, before the pandemic, India had exported just over 2 lakh metric tonnes of wheat in the 2019-2020 financial year. This is about five per cent of the wheat exported in the first five months of the current financial year.
Tarun Bajaj, Director, Agricultural and Processed Food Products Export Development Authority, said, “Demand for Indian wheat increased during the pandemic when food security first emerged as a priority for countries around the world, and rose again when the Ukraine conflict broke out. ” APEDA) – a trade promotion body under the Ministry of Commerce.
“This year wheat and rice have become a sought-after commodity,” he said.
According to Bajaj, wheat exports have doubled due to government-to-government contracts, which were already in place with letters of credit issued before the ban came into force in May.
“We also got market access in countries like Egypt before the sanctions. But mostly, the contracts that have been honored are with countries that have regularly imported Indian wheat over the years, like Bangladesh,” said the director of APEDA.
An analysis of commerce ministry data shows that over the past year, there has been a rapid increase in Indian wheat exports to East Asian countries such as Vietnam, the Philippines, Thailand, and, as mentioned earlier, the influence of South Korea. because of. Russo-Ukraine War.
For example, Vietnam imported just 4,500 metric tonnes of wheat in April-August 2021, compared to around 73,000 metric tonnes of wheat for the same period this year. The last time Vietnam imported the same quantity of wheat from India was in 2013 (62,000 metric tons).
Similarly, Philippines imported 21 MT in April-August 2021, which increased to 1.74 lakh MT during the same period this year. Thailand received over 1,300 MT of Indian wheat in April-August 2021 which has now increased to 2.12 lakh MT for the same period this year.
The Curious Case of Nepal
While India has eased wheat export restrictions for most of its neighbors with food security concerns, Nepal is not one of them.
According to commerce ministry data, wheat exports to Nepal fell from 1.64 lakh metric tonnes in April-August 2021 to only 15,000 metric tonnes during the same period this year.
According to ministry sources, the problem could be that Nepalese exports were not supported by letters of credit before the ban, or that Nepal used the time window provided by India after the ban to ask nations to form governments. Did not do it – demand for wheat from the government
(Edited by Polomi Banerjee)