India bans wheat exports to ensure sufficient domestic food grain supply
13.06.2022 12:26 "Agro Perspectiva" (Kyiv) —
According to the report of the USDA Grain: World Markets and Trade (June 2022), the trade year (TY) 2022/23 (July-June) export forecast for India is revised down 2.0 million tons to 6.0 million after the Indian government implemented restrictions on wheat exports effective May 13, 2022. The export ban comes after a heatwave scorched India’s wheat belt this spring, leading to a smaller-than-expected 2022 crop. India is also grappling with rising food prices and low procurement under its minimum support price (MSP) program, further influencing the decision to curb exports to ensure a sufficient supply of wheat for domestic use. India’s export ban removes another source of affordable wheat for many low-income importing countries, adding stress to an already tight global market. Strong global demand has outpaced production, driving world wheat prices to their highest levels in a decade. In 2020/21, India emerged as an important wheat exporter to the Middle East and South Asia. Wheat exports in 2021/22 had been growing significantly, with exports reaching a record 6.8 million tons in the first 9 months of the trade year. Additionally, India’s exports have extended to markets traditionally supplied by Ukraine. India has suggested it may allow some exemptions to the ban on a case-by-case basis for government-to- government sales for food security reasons. It has received requests for more than 1.5 million tons from several countries under the exemption. In addition to the export ban, the government of India is adjusting its domestic food security policies. Due to the tight wheat supply situation, the government has shifted to procuring and distributing more rice and less wheat in its food security programs. As a result, overall wheat consumption in India is forecast to decline, while rice consumption is forecast to rise. Unlike wheat, India rice supplies are plentiful in 2022/23. Rice exports are forecast to remain robust as India remains the dominant global rice exporter. Following multiple seasons of record crops, rice stocks have more than doubled in recent years, leaving ample room for both exports and higher domestic use. Despite increased exports and more distribution for the government’s food security programs, India’s rice stocks are still expected to rise. The ample supply situation suggests that export restrictions on rice are less likely. AGRO PERSPECTIVA offers Agro + «Ukrainian Grain & Oilseed Market» weekly analytical bulletin. Concerning subscription please contact: client@agroperspectiva.com or +380675964652 (WhatsApp, Viber, Telegram).
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