Conditional ban on exports to curb wheat prices

New Delhi: India has banned the export of wheat with immediate effect as part of measures to control rising prices domestically. This information has been received from the official notification. However, the Directorate General of Foreign Trade (DGFT) said in a notification issued on May 13, export of consignments for which irrevocable letters of credit […]
 


Conditional ban on exports to curb wheat prices

New Delhi: India has banned the export of wheat with immediate effect as part of measures to control rising prices domestically. This information has been received from the official notification. However, the Directorate General of Foreign Trade (DGFT) said in a notification issued on May 13, export of consignments for which irrevocable letters of credit (LoCs) have been issued on or before the date of this notification will be allowed. The DGFT said, the export policy of wheat is banned with immediate effect… It also clarified that permission granted by the Government of India to other countries to meet their food security needs and based on the request of their governments. Wheat export will be allowed on this basis.

In a separate notification, DGFT announced easing of export conditions for onion seeds. DGFT said, the export policy of onion seeds is kept under limited category with immediate effect. Earlier the export of onion seeds was banned. Official data released this week showed retail inflation hit an eight-year high in April, driven by higher fuel and food prices.

The export ban has been imposed in the wake of disruption in global supply of wheat due to the war between Russia and Ukraine. Russia and Ukraine have been major exporters of wheat. Due to strong global demand, India’s wheat exports increased to 7 million tonnes or US$ 2.05 billion in 2021-22. According to DGFT data, out of the total wheat exports in the last financial year, around 50 per cent of the consignments were sent to Bangladesh. The country exported around 9,63,000 tonnes of wheat this year as against 1,30,000 tonnes in the same period last year.

India was expected to export 10 million tonnes of wheat in 2022-23. The commerce ministry had recently said that India would send business delegations to nine countries—Morocco, Tunisia, Indonesia, Philippines, Thailand, Vietnam, Turkey, Algeria and Lebanon—to explore possibilities of boosting wheat export consignments. India’s wheat procurement has also declined by 44 per cent to 1.62 lakh tonnes in the current Rabi marketing season till May 1 due to heavy lifting by private traders and less arrivals in Punjab-Haryana. The government had procured 2.88 lakh tonnes of wheat in the year-ago period. Rabi marketing season runs from April to March.

Private companies have bought wheat at a price higher than the Minimum Support Price (MSP) amid rising demand for food grains for export. The Center has set a target to procure a record 4.44 lakh tonnes of wheat in the marketing year 2022-23, as against 4.33 lakh tonnes in the previous marketing year. The Center has stopped the sale of wheat under the Free Market Sales Scheme (OMSS) to bulk consumers amid low procurement for the central pool and asked them not to wait for the scheme to launch to buy the grain. According to the second advance estimate of the Ministry of Agriculture, wheat production is estimated to be a record 11.13 lakh tonnes in the crop year 2021-22 (July-June).