INDIA -The Roller Flour Millers’ Federation, an Indian trade group, holds that the availability of wheat in the market is in jeopardy, suggesting lowered production estimate of 101 million to 103 million tonnes, which could inspire an extended ban of wheat exports.
The government’s estimate was 112.74 million tonnes in 2023, up from 107.7 million tonnes a year ago, which according to traders, was an overestimate caused by the government’s failure to take into account heatwaves in February and March and untimely heavy rainfall in April.
India consumes about 108 million tonnes of wheat per year, and the current estimate is barely enough to sustain local demand and could prompt stricter measures to limit exports.
India decided to approve wheat and broken rice exports to a few selected countries following their requests to allow the shipments of the grains from April 2023, believing that the yield this year would be high.
The South Asian country banned wheat and broken rice exports in 2022 to lower local prices following the Russo-Ukrainian war.
Therefore, demand for wheat from other countries such as India, rose to fill the gaps created by strife in two of the world’s largest producers, creating scarcity in the country and, therefore, a surge in domestic prices.
In response to the local price increases, India imposed a ban in May of 2022 and set a fixed price of 21,250 rupees (US$256.77) per tonne.
Indian millers’ groups were happy with the ban and beseeched the government to keep it in place to protect local prices further.
“The government’s efforts have paid off, and local prices have fallen, giving relief to consumers and a wide range of industries, including bread and biscuit makers,” said Pramod Kumar, president of the Roller Flour Millers’ Federation of India.
While the ban on wheat stayed in place, India relaxed its ban on rice exports and approved the export of 350,000 tonnes of broken rice to Senegal and Gambia in March, six months after a ban was instituted in September 2022.
Following persistent requests, India announced that it would allow broken rice exports to Indonesia, Senegal, and Gambia in the 2023/24 financial year from April 2023.
However, according to a report by Reuters, wheat prices have increased 10% in the last two months to US$303 a tonne, causing the government to impose a limit on the amount of wheat stocks traders can hold.
This trend could force the government to revert to the initial ban to ensure sufficient local supply.
“The government was forced to U-turn on exports last year because of the wrong estimate. This year, it could be forced to allow duty-free imports in the December quarter,” a Mumbai trader said.