India will soon be sending trade delegations to at least nine wheat importing nations to explore the possibilities of boosting wheat exports. The move comes amid widespread loss of yield in major wheat growing states, and low response to public procurement by farmers who continue to sell at much higher prices to traders.
The Centre will send trade delegations to Morocco, Tunisia, Indonesia, Philippines, Thailand, Vietnam, Turkey, Algeria, and Lebanon to promote Indian wheat, the Commerce and Industry Ministry said on May 12.
The move is part of the government's efforts to export 10 million tonnes of wheat in 2022-23, amid rising global demand, it said. Not more than 10 days after the Ukraine crisis began, the Centre began discussions with various countries, including Egypt, Turkey, China, Bosnia, Sudan, Nigeria and Iran on commencing wheat exports. Initial shipments have also begun to some of these nations.
The Agricultural and Processed Food Products Export Development Authority (APEDA), under the Commerce & Industry Ministry, has also planned to organize a series of sensitization meetings on exports in major wheat-growing states such as Punjab, Haryana, Madhya Pradesh, Uttar Pradesh and Rajasthan, it said.
APEDA has set up a task force on wheat exports that include officials from various ministries such as Shipping and railways, and exporters. APEDA officials said that Indian farmers, traders and exporters have been advised to follow all the quality norms of importing countries so that India emerges as a reliable supplier of wheat globally.
Exports moving ahead
According to estimates by the Directorate General of Foreign Trade (DGFT), India has exported a record seven million tonne (MT) of wheat in 2021-22, which is valued at $2.05 billion. Out of the total shipment, around 50 percent of wheat was exported to Bangladesh in the last fiscal.
Recently, Egypt, which is one of the world’s biggest importers of wheat, had agreed to source wheat from India. Egyptian authorities have now allowed India into the list of accredited countries which can export wheat to the country. Egypt imported 6.1 MT of wheat in 2021, of which 80 percent were from Russia and Ukraine.
APEDA has already communicated to exporters to register with Egypt’s public procurement agency – General Authority of Supplies and Commodities, which manages wheat and sugar imports to the north African country.
In April, domestic wholesale wheat prices rose to a decadal high. Prices have risen by 5-7 percent in March and April. However, they are yet to catch up with the export prices, which remain at record highs.
Slow procurement
Currently, farmers are not willing to sell to the government since the procurement prices being offered by private traders and exporters are much higher, multiple traders in the wheat exporting hub of Ahmedabad said.
Last week, the government revised its wheat production estimate for the 2021-22 crop year (July 2021-June 2022) downwards by 5.7 percent. National production is now estimated to be 105 million tonnes, down from 111.5 million tonnes.
As a result of heatwave conditions in March, both the quality and weight of output suffered in Punjab, Haryana, Madhya Pradesh and Uttar Pradesh. These states have reported a fall in yield by up to 15 percent as sudden changes in temperature and climatic conditions have led to the grains shrivelling.
For the ongoing 2021-22 crop year, the government had last year hiked the minimum support price (MSP) for wheat by Rs 40 to Rs 2,015 per quintal. The MSP, however, is way lower than the going rate of Rs 2,400-2,500 per quintal as of February 11 at most major wholesale markets across the country.
As a result of this and the flurry of exports, the procurement target for the 2022-23 wheat marketing year (April-March) has also fallen to 19.5 million tonnes, down from the earlier target of 44 million tonnes. As of May 8, procurement by the Food Corporation of India (FCI) and other government agencies stood at 17.5 million tonnes.
Food Corporation of India (FCI) data show that the combined stockpile of wheat had risen to a record 603 lakh tonnes in July 2021. The level currently stands at 303 lakh tonnes, data shows.