India’s wheat exports:
- The Russia-Ukraine conflict had disrupted the global wheat supply chains given that these two countries alone accounted for a substantial portion of the global wheat production. This provided an opportunity for India to boost its own wheat exports to fill in the global shortage.
- Apart from increasing wheat exports to the current importers, India also sought to sign agreements with other countries to establish newer markets for Indian wheat. In this direction, India had even sent trade delegations to countries like Morocco, Tunisia, Indonesia, Philippines, Thailand, Vietnam, Turkey, Algeria and Lebanon to explore possibilities of boosting wheat exports.
- Wheat exports in the 2021-2022 financial year were estimated at 7.85 million tonnes, a quadrupling from 2.1 million tonnes in the previous year. Competitive price, acceptable quality, availability of surplus wheat and geopolitical reasons have resulted in a sharp rise in wheat exports from India. Exports this fiscal are expected to be almost 10 million tonnes worth $3 billion.
Reasons for the ban on wheat exports:
Decrease in production and procurement:
- The extreme temperatures recorded in March and April across North India, which has resulted in reduced wheat production, is one of the main reasons for the ban on wheat exports.
- Maximum temperatures in Punjab, one of the prominent wheat-producing states was over 6°C higher than the usual, compared to the long period average. The actual maximum temperatures have been over the 40°C mark across the State in April.
- The wheat production estimate for the crop year ending June has reduced from the previous 111.32 million tonnes (MT) to 105 MT.
- The procurement of wheat has also been low compared to previous years.
- The decrease in production estimates and a considerable fall in wheat procurement have raised concerns that domestic consumption may get impacted.
Increase in domestic price:
- The domestic price of wheat and wheat flour has been on the rise with both wholesale and retail inflation reaching record highs. Given that wheat remains one of the important food grains, this price rise was adding to the burden of Indian households.
Food security concerns:
- India’s pitch to boost wheat exports has been opposed by food security campaigners who have instead insisted on a more cautious approach. They emphasize that ensuring sufficient availability of wheat grains for internal consumption and ensuring the stability of prices domestically should be more important priorities rather than increasing exports.
- They have argued that the increase in exports should not be done at the cost of domestic consumption.