India has de-escalated from the position of claiming to distribute food across the world during the COVID era to currently banning the export of wheat with immediate effect. India has banned exports to control the increasing price of wheat in the market.
At present, the daily average retail price of wheat has increased 19.34 per cent to Rs 29.49 per kg on May 9. This is a substantial increase compared with Rs 24.71 per kg a year ago.
There are multiple reasons that have led to this decision:
One of the main reasons stated by the consumer affairs, food & public distribution ministry is that the decision to restrict wheat exports will control food prices. This will further strengthen the food security of India and countries facing a deficit, and India remains a reliable supplier as it is honouring all contracts, News18 reported.
Another reason is the ongoing invasion of Ukraine by Russia. International wheat prices have been going up since the beginning of the Russia-Ukraine war. Global wheat prices have so far increased by over 40 per cent. This major turbulence is caused by Ukraine and Russia, which account for a third of global wheat and barley exports. Wheat from other countries was selling for as high as USD 420-480 per tonne.
Food Secretary Sudhanshu Pandey explained the inflation. He said that the retail prices of wheat and wheat flour in India have risen in the past year by up to 19 per cent. The government’s action to ban wheat exports is expected to bring down the prices in the domestic markets in a few weeks.
The daily average retail price of wheat has increased by 19.34 per cent to Rs 29.49 per kg on May 9, compared with Rs 24.71 per kg in the year-ago period. This has increased retail atta prices by 14.27 per cent to Rs 32.91 per kg, up from Rs 28.8 per kg in the previous period.
In the wholesale market too, the daily average price of wheat rose 21.55 per cent to Rs 25.82 per kg on May 9 compared with Rs 21.24 per kg in the year-ago period, while atta prices rose 15.88 per cent to Rs 27.89 per kg from 24.06 per kg in the comparable period, the report added.
Meanwhile, the country’s wheat production has been revised lower to 105-106 million tonnes for the 2022-23 crop year (July-June) from an earlier estimate of 111 million tonnes due to the heatwave, especially in northwestern India.
However, there are some exemptions to the ban. The government has allowed wheat shipments with valid irrevocable letters of credit (LoC) issued on or before the date of the notification. The country has contracted for the export of 4.5 million tonnes of wheat so far this year. Out of that, 1.46 million tonnes were exported in April, as per the official data.
The centre has informed that exports could still take place if New Delhi approved a request by other governments “to meet their food security needs”. Egypt is one of the countries that are in talks with India on the exemption.