Wheat prices have doubled in India since the Russia-Ukraine war as both the nations account for 30 per cent of the global trade. With supplies from the Black Sea region affected due to the war, demand for Indian wheat increased, particularly from South, South-East and West Asia, besides Africa.
The demand resulted in India shipping out a record of over 7,75 mt of wheat last fiscal, while exports in April were over 1,75 mt. This month, they are likely to top 1,5 mt.
Also, exporters had signed 4,1 mt of wheat for shipments abroad until July. While imposing the ban, the Centre has assured the exports will be allowed if exporters have an irrevocable letter of credit.
India’s problems on the wheat front cropped up when the crop was affected by the heatwave that swept across the country in March-April. This affected the yield, and production is now expected to be below 100 mt against the initial estimates of a record 111,32 mt.
Besides, FCI’s procurement dropping sharply raised concerns over the Centre meeting domestic demand, including distribution of the grain in the public distribution system. This and concerns over global wheat production next year forced the Government to ban exports.
In the global market, wheat prices have eased by over 1.5 per cent over the last two sessions to $12,11 a bushel ($444,92 a tonne) from the highs of $12,8 seen earlier this week following the export ban. The fall follows reports that the UN plans a revamp in wheat exports affected by the Ukraine war.
According to the International Grains Council, Argentine wheat dropped on May 18 to $481 a tonne, while European to $466. US Hard Red Winter wheat declined to $560 and Soft Red Winter wheat to $487.
Source: The Hindu business