Virendra Pandit
New Delhi: With wheat export hampered because of the ongoing Russia-Ukraine war, Prime Minister Narendra Modi said on Tuesday the conflict between the two major exporters has increased the demand for India’s wheat in global markets.
Russia and Ukraine together account for 30 percent of world wheat exports.
This is a good opportunity to provide the best-quality Indian product globally, the PM said at a webinar on “Financing for Growth & Aspirational Economy’, organized by the Union Finance Ministry.
Financial institutions and government departments should work to meet the financing needs of exporters, he said.
Modi also urged financial institutions to support the rural economy and identify eight to ten potential sectors where India can emerge as a strong player globally.
Wheat prices have skyrocketed globally because of the geopolitical situation, since Russia and Ukraine are the world’s second-largest and fourth-largest wheat exporters, respectively. The war has increased prices of wheat and corn traded at the Chicago Board of Trade Futures Exchange to their highest since March 2008 and December 2012, respectively, the media reported.
This has made Indian wheat exports competitive. Wheat from Gujarat, Rajasthan, and Uttar Pradesh is currently being delivered by rail wagons or trucks at warehouses near Kandla Port in Gujarat at the rate of Rs 2,400-2,450 per quintal, compared to Rs 2,100 only two weeks ago. This is more than the MSP of Rs.2015 per quintal for the new crop set to arrive in the markets this month.
Amid the Russia-Ukraine war, India’s wheat exports have picked up after global prices surged, and total shipments from the country have already touched a record of 6.6 million tonnes in FY22 so far, Union Food Secretary Sudhanshu Pandey said.
Even though India has a surplus of wheat, it may not ship it to Europe because of a lack of regulatory approvals. Also, the Russian wheat export to Europe continues as the West has put agricultural trade out of sanctions.
Wheat crops in Russia and Ukraine mature in August and September. As a result, global wheat prices have already gone up to Rs.25,000 per tonne.
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, according to the Union Agriculture Ministry’s second advance estimate.
Other global players will enter the market later, after their summer season. “We will have an adequate stock of wheat and the new crop will also be available to private players for normal export,” Pandey said.
Benchmark wheat prices in Chicago surged by over 40 percent this week on fears of supply disruptions because of sanctions on Russia and the war in Ukraine. Buyers are inquiring about alternatives to Black Sea shipments of wheat.
India will also send 50,000 tonnes of wheat to Afghanistan to help it face poverty and hunger since the takeover by the Taliban in August last year. New Delhi has already transported 4,000 tonnes of the grain to Afghanistan via an infrequently used land route through Pakistan.
Indian officials said wheat exports to neighboring Bangladesh will increase in the future. Bangladesh bought 60 percent of India’s wheat, followed by Sri Lanka (8.1 percent) and the United Arab Emirates (7.3 percent). Because of changing trading patterns, India has been exporting wheat to Indonesia, the Philippines, and South Korea in recent years.
In 2019, China (133.6 million tonnes) and India (103.6 million tonnes) were top wheat producers, followed by Russia (74.5 million tonnes). Ukraine stood seventh (28.4 million tonnes), according to the United Nations Food and Agricultural Organization.