Explained | Why is India looking to boost wheat exports?

Does India have a surplus of wheat production? Which countries are considering importing the food grain?

Does India have a surplus of wheat production? Which countries are considering importing the food grain?

The story so far:The Russian invasion of Ukraine and subsequent Western sanctions against Russia have impacted wheat exports from the Black Sea region and food security in several countries, especially Africa and western Asia. The disruption to the global wheat supply has in turn created opportunities that Indian grain exporters are looking for, especially given the domestic grain surplus. The Union’s trade and industry minister, Piyush Goyal, said on Friday that Egypt, one of the largest importers of wheat, had agreed to source the grain from India.

What is the status of Indian wheat exports?

Globally, Russia is the market leader for wheat exports (almost 15% share) and Ukraine is also a major producer. Exports from these two countries have been affected by the war and sanctions.

India expects to produce 112 million tons of wheat this season. The government needs 24-26 million tons per year for its food security programs. With a surplus of wheat production, opportunities for export have arisen. Wheat exports in fiscal year 2021-2022 were estimated at 7.85 million tons, a fourfold increase from 2.1 million tons in the previous year.

More countries are turning to India for its 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. The export of this fiscal is expected to be close to 10 million tons worth $3 billion.

What new markets are expected to buy from India?

The different types of wheat produced in India are of the grind quality. So, besides Egypt and Jordan, countries in East Africa are likely to get the food grain from India as well. India has sent files to more than 20 countries and all these countries are being discussed at different levels. The aim is for each of these countries to reach an early solution about the Pest Risk Analysis, so that the export can start.

The Agricultural and Processed Food Products Export Development Authority (APEDA) and the Ministry of Agriculture also send delegations to various countries to resolve any market problems.

What is being done to facilitate exports?

The Department of Commerce has set up an internal mechanism to facilitate this and prepare the paperwork for the associated sanitary and phytosanitary applications to facilitate shipments.

Wheat comes in full shiploads and has to be transported from the growing areas to the ports. The railroads provide priority rakes to move the wheat. Tarun Bajaj, director at APEDA, says the railways, ports and testing labs are all set up to meet the requirements.

What standards do buyer countries use to approve Indian wheat?

Countries that have not previously imported wheat from India are pushing for the completion of the Pest Risk Analysis to provide market access. There are also other different standards that the buyers share with their sellers here. While Indian suppliers can currently meet these criteria, the Indian authorities are working closely together to intervene and negotiate a solution if “unreasonable” standards are set.

What is the future perspective?

The government is optimistic about long-term export opportunities not just for wheat, but for all grains, including millet and superfoods.

Trade sources say that if Indian wheat prices remain competitive and geopolitical and weather conditions remain favourable, the space will be good for wheat exports. India has won the trust of markets such as Sri Lanka and Bangladesh. It must also establish itself in the new markets and the government must facilitate it.

www.thehindu.com

Leave a Reply

Your email address will not be published.