The Government of India announced a sudden ban on export of wheat on May 13,2022, a few days after Prime Minister Narendra Modi had stated that“at a time when the world is facing a shortage of wheat, the farmers of India have stepped forward to feed the world”
The Directorate General of Foreign Trade (DGFT) issued a notification banning exports of wheat with immediate effect to control price rise.
Even a day before the export ban came into effect, Government officials were looking out for possible export locations,indicating that there were no plans for control of wheat exports
The sudden turnaround in the export policy appears to be on account of fears that low public procurement would affect domestic food security.The system of public procurement has been in place since the mid 1960s, and has been the backbone of food policy in India
The restrictions would not apply in cases where prior commitments have been made by private traders through Letter of Credit as well as in situations where permission is granted by the government to other countries to meet their food security needs.
Present status of India’s wheat exports
- Major export countries:
- Bangladesh(55.9 percent)
- Sri Lanka(7.9 percent)
- UAE(6.9 percent)
- Indonesia(5.9 percent)
- Yemen(5.3 percent)
- Philippines(5.1 percent)
Export statistics: In the current financial year 2022-2023, the government estimates about 45 lakh metric tonnes of wheat to have been contracted for exports
- It has set a goal of exporting 10 million tons of the grain in 2022-23.
- Wheat production in India is expected to be lower than the earlier estimates.
- India exported 7 million tonnes(MT) of wheat in 2021-22 which is valued at $2.05 billion.
Out of total shipment around 50% of wheat was exported to Bangladesh in the last fiscal year.
Wheat
The wheat in India is largely a soft/medium hard, medium protein, white bread wheat, almost similar to U.S. hard white wheat
Wheat is a major cereal crop in India and is grown mainly in central and western India is typically hard, with high protein and high gluten content.
It is a Rabi Crop sown in October-December and harvested during April-June.
Temperature required: Between 23±3°C and for good tillering temperature should range between 16-20°C
Better variety of wheat is produced in areas having cool, moist weather during the major portion of the growing period followed by dry, warm weather to enable the grain to ripen properly.
Soil Type: Soils with a clay loam or loam texture, good structure and moderate water holding capacity are ideal for wheat cultivation
Wheat producing states in India: Uttar Pradesh, Punjab, Haryana, Madhya Pradesh, Rajasthan, Bihar and Gujarat.
Reasons for the sudden decision by the Government
- wheat production this year is feared to be lower than 100 million tonnes (mt) against initial estimates of a record 111.32 mt.
- Procurement by the Food Corporation of India (FCI) dropped by over 50 percent compared with last year.
Wheat price is increase in the wake of export demand triggered by the Russia-Ukraine war and soaring inflation
A sharp surge in global wheat prices that could have affected Indian consumers.
Fertilizer prices have more than trebled since the Russia-Ukraine war broke out. It will likely lead to lower sowing of wheat across the world and thus, the tight supply situation may continue into 2023.
Demand for India’s wheat expected to rise
- Wheat prices have been rising internationally on account of supply shortages due to the Russia-Ukraine war. The demand for Indian wheat has increased overseas.
- More countries are turning to India because of the competitive price, acceptable quality, availability of surplus wheat and geopolitical reasons.
While the existing importers are buying more, new markets have emerged for Indian wheat. Exports this fiscal year are expected to be almost 10 million tonnes worth $3 billion
Food Corporation of India (FCI)
● It is a Public Sector Undertaking, under the Department of Food & Public Distribution, Ministry of Consumer Affairs, Food and Public Distribution.
● FCI is a statutory body set up in 1965 under the Food Corporations Act 1964.
● It was established against the backdrop of a major shortage of grains, especially wheat.
● It has the primary duty to undertake purchase, store, move/transport, distribute and sell food grains and other foodstuffs.
Bhalia Variety of Wheat
● It is a variety of wheat that received GI certification in 2011.
● It has high protein content and is sweet in taste.
● The crop is grown mostly across the Bhal region of Gujarat which includes
● This variety is grown in rainfed conditions without irrigation.
Way Forward
- A well functioning PDS can control prices and offer relief to consumers. At the same time, procurement policy can and should offer a reasonable income to farmers
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