Amid the spike in wheat exports from India in the aftermath of Russia's war with Ukraine, there are indications that India could seize the opportunity to become the largest wheat exporter in the world and could potentially replace Russia and Ukraine in wheat exports.
Prime Minister Narendra Modi too has acknowledged this opportunity. Speaking at a post-budget webinar on financing for India's growth on Tuesday, PM Modi said that India could fill the vacuum created by Russia and Ukraine.
"The globe's attraction towards India's wheat has increased of late. Are our financial institutions, export-import department and shipping industry ready for this? Are they making comprehensive attempts to cash in on the big opportunity that has arisen for India," PM Modi said.
Russia and Ukraine together comprise 25 per cent of the world's wheat exports. Although India is the second-largest wheat producer in the world, it accounts for less than 1 per cent of the global export of wheat. And now due to the ongoing war in Ukraine, and the subsequent disruption in the market there, India could step in to fill the gap.
It is to be noted that the war in Ukraine notwithstanding, India's exports of the grain have been steadily rising since last year, with a 279 per cent increase year-on-year (YoY) in Jan 2022, government's trade data shows.
In January 2021, India's wheat exports were worth $80 million, which reached $304 million in January 2022. India's exports increased by a whopping 387 per cent in April-Jun 2022 YoY.
Highlighting India's potential as a major player in the global market, Food secretary Sudhanshu Pandey told PTI recently that India can expect about 7 million tonnes of exports this year.
Pandey also said that India has exported 6.6 million tonnes of wheat by the end of February, crossing the historical high of 6.5 million tonnes achieved earlier in 2012-13.
India's quantity of wheat export has been going up. Trade data shows that the volume of wheat exports increased by 215 per cent in Jan 2022 YoY. The country exported 308,818.97 kgs of wheat in January last year, which rose to a whopping 975,035.62 kgs in January 2022. Before this, the volume of wheat exports increased by 373 per cent to 5035108.96 kgs in April-Dec 2021 YoY.
Besides, it is encouraging that India's wheat production is estimated to touch a new record of 111.32 million tonnes in the 2021-22 crop year (July-June) as against 109.59 million tonnes in the previous year, as per the Agriculture Ministry's second advance estimate.
As the second-largest wheat producer, India has large inventories of the grain and has recently had five consecutive record annual crops. Moreover, it will be to India's advantage as the new rabi (winter) wheat crop will be available in the market from March 15 onwards compared to other global wheat producers. Other global players will enter the market later after the end of their summer season.
"We will have adequate stock of wheat and the new crop will also be available to private players for normal export," Pandey said.
And today, India signed contracts to export about 500,000 tonnes of wheat to tap the overseas market.
Until now, India exported wheat mainly to neighbouring countries, with Bangladesh having the largest share of more than 54 per cent in both volume and value terms in 2020-21. In 2020-21, India entered new wheat markets such as Yemen, Afghanistan, Qatar and Indonesia.
The top ten importing countries for Indian wheat in 2020-21 are Bangladesh, Nepal, United Arab Emirates, Sri Lanka, Yemen, Afghanistan, Qatar, Indonesia, Oman and Malaysia, according to data by the Directorate General of Commercial Intelligence and Statistics (DGCIS).
Traders are now keen to capitalise on any export opportunity, according to a recent Reuters report. India guarantees producers about $257 a tonne for domestic sales, while benchmark European wheat jumped above 400 euros ($435) on Monday and benchmark wheat prices in Chicago settled at their highest in 14 years.
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