wheat export ban

The government is considering lifting the wheat export ban and is looking at the current supply of wheat in the central pool and the distribution needs under the National Food Security Act (NFSA), 2013.
Due to the recent discontinuation of the Pradhan Mantri Garib Kalyan Yojana (PMGKAY), the overall distribution of wheat is expected to be lower.

Global wheat trade:
- India is the world’s second-biggest wheat producer after China.
- But it accounts for less than 1% of the global wheat trade.
- It keeps much of it to provide subsidised food for the poor.
Export Market:
- Its top export markets are Bangladesh, Nepal and Sri Lanka – as well as the United Arab Emirates (UAE).

Wheat stock:
- According to the Food Corporation of India (FCI), wheat stocks have been decreasing at a rate of 2 million tonnes per month over the last six months and are currently the lowest in six years.
- The government is considering lifting the ban on wheat exports once stocks are sufficient and to ensure that food security is maintained.
Measures Taken:
- The government has taken several measures to address concerns about low wheat procurement and rising wheat prices.
- These measures include
  - Reducing wheat allocation to some states and territories, increasing the allocation of rice, banning the export of broken non-basmati rice,
  - considering open market sales to keep prices in check.
Wheat output:
- The wheat output for the year 2023 is expected to be better than last year, which could help increase the wheat supply in the market.

Global wheat price:
- India suspended the export of wheat in May 2022.
- In a notification published in the government gazette, the Directorate General of Foreign Trade (DGFT) justified the ban by giving reasons that soaring global wheat prices have put pressure on food security, not only in India but also in neighbouring and vulnerable nations.
- However, the export will be allowed based on permission granted by the Government of India to other countries to meet their food security needs and based on the request of their governments.
Impact on Wheat Production:
- The ban also prompted a decrease in wheat production after its production was affected by a heatwave that swept across the country during March-April 2022, while the FCI was unable to accumulate adequate buffer stocks.
The rise in Inflation:
- The rising inflation also prompted this step.
- India’s Wholesale Price Index (WPI) has increased from 2.26% at the start of 2022 to 14.55 (May 2022).
- Retail inflation, too, hit an eight-year high of 7.79% in April 2022, driven by rising food and fuel prices.

Higher exports:
- Higher exports would help India to bring down record inventories and provide Asian buyers with cheaper supplies amid a rally in global prices due to limited supplies from major exporters such as Russia and Canada.
Opportunities for India:
- The opportunities included exporting food grain such as wheat and the possibility of manufactured goods being exported to destinations for which supplies had become unreliable.
The surplus in production:
- India has reached out to more than 20 countries regarding exporting wheat and is targeting a record 15 million tonnes of wheat for export this year.
- India is expected to have a surplus this year, producing more than 111 million tonnes of the crop.
- There are already signs of increased wheat purchases by private traders: given the lucrative export markets.
Low-cost wheat:
- While there has been a surge in global prices, India’s wheat rates are relatively competitive.
Export to other countries:
- In recent years, India has mainly exported wheat to countries including Bangladesh, which receives about half of India’s shipments of grain, including the UAE and Sri Lanka.

Pic Courtesy: Freepik

Content Source: The Indian Express