Sunday, October 2, 2022

Wheat crisis in India: Govt Bans Wheat Export

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The government has banned the export of wheat with immediate effect in order to control food prices in the domestic market. The daily average retail price of wheat has increased 19.34 per cent to Rs 29.49 per kg on May 9, compared with Rs 24.71 per kg a year ago.

Why Has The Govt Banned Wheat Export?

The government has banned wheat exports in order to control food prices, strengthen the food security of India and countries facing a deficit.

International wheat prices have been increasing. Since the beginning of the Russia-Ukraine war, global wheat prices have so far increased over 40 per cent. Before the war, Ukraine and Russia accounted for a third of global wheat and barley exports. Wheat from other countries was selling as high as USD 420-480 per tonne.

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Food Secretary Sudhanshu Pandey has said retail prices of wheat and wheat flour in India have risen in the past year by up to 19 per cent, and the government’s decision to ban wheat export is expected to reduce the domestic prices in a week or so.

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. Similarly, retail wheat prices have shot up by 14.27 per cent to Rs 32.91 per kg from Rs 28.8 per kg in the comparable period.

wheat export ban: India bans wheat exports on food security concerns - The  Economic Times

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In the wholesale market too, the daily average price of wheat increased 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 wheat price increased 15.88 per cent to Rs 27.89 per kg from 24.06 per kg in the comparable period.

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 heatwave, especially in northwestern India.

Is export of wheat banned completely?

The ban has some exemptions. 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 fiscal. Out of which, 1.46 million tonnes was exported in April, as per the official data.

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