Even as the wheat export ban by the government has some exemptions where the outbound shipment can be allowed, the Directorate General of Foreign Trade (DGFT) has asked authorities to issue registration of contracts (RCs) to the wheat exporters who have irrevocable letters of credit (LoC). The government has allowed wheat shipments with valid irrevocable LoC.
The DGFT is an arm of the commerce ministry, which deals with export- and import-related matters.
The government last week banned the export of wheat with immediate effect in order to control food prices in the domestic market. “The decision to restrict wheat exports will control food prices, strengthen the food security of India and countries facing a deficit, and that India remains a reliable supplier as it is honouring all contracts,” the food ministry has said.
Wheat Prices Go Up
Wheat prices in both international and domestic markets have gone up recently. Amid the Russia-Ukraine war, global wheat prices have increased over 40 per cent. Before the war, Ukraine and Russia accounted for a third of global wheat and barley exports. Wheat from other countries was selling as high as USD 420-480 per tonne. The price on Monday jumped to 435 euros (USD 453) per tonne as the European market opened.
In India, the daily average retail price of wheat rose 19.34 per cent to Rs 29.49 per kg on May 9, against Rs 24.71 per kg a year ago.
Food Secretary Sudhanshu Pandey has ealier said retail prices of wheat and wheat flour in India have risen in the past year by up to 19 per cent, and the government’s decision to ban wheat export is expected to cool down the domestic prices in a week or so.
Wheat Production & Stock in India
India’s wheat production has been revised lower to 105-106 million tonnes for the 2022-23 crop year (July-June) from an earlier estimate of 111 million tonnes, due to heatwave, especially in northwestern India. The government will also buy a sharply lower quantity of wheat — 19.5 million tonnes, down from a targeted 44 million tonnes.
The country’s opening stock of wheat stood at 19 million tonnes, lower than last year’s balance of 27.3 million tonnes. “So, if you total up, against the stocks of 70.6 million last year, this year our stocks would be 37.5 million tonnes,” Pandey has said.
“Global demand was rising and different countries were putting restrictions. Sentiments were driving prices. We are quite confident, now also the sentiments will push down the prices,” the food secretary recently told PTI.
Egypt In Talks
The Indian government has said exports could still take place if New Delhi approved a request by other governments “to meet their food securities needs”. Egypt is in talks with India on the exemption.
Egypt Supply Minister Ali Moselhy said any agreements by Egypt’s government to purchase Indian wheat will not be affected by an export ban announced by New Delhi. “For India, we are talking with them on the basis of a government agreement. The ban exempts governments including the government of Egypt,” according to a Reuters report.
Read all the Latest Business News here
Comments
0 comment