ABSTRACT

India’s wheat export averted the global crisis but this will increase the price of wheat so the government of India decided to restrict wheat export so that it controls food prices, strengthening food security of India and countries facing a deficit. By preventing exports in an unregulated manner, it maintains India’s reliability as a supplier. 

INTRODUCTION

During every crisis we have 2 sets of countries, one that makes a lot of noise, they condemn, they throw tantrums while other countries make a difference. They don’t publish grand statements, instead they work to solve the crisis. India belongs to the second one; it is stepping to plug the gaps created by the war in Ukraine. 

Russia and Ukraine are the biggest exporters of wheat in the world. They make up 30% of total wheat sales. Since February that trade has dropped, we see that most shipments have passed through the black sea but right now black sea is a ground of battle. Russian warship stations are there, so the supply is not reliable in that area. 

What happens when 30% of any commodity supply disappears? 

Two things happen 1) shortage and 2) inflation and to prevent this India has stepped in. Last month it exported 1.4 million tonnes of wheat and that’s a record export for India. 

In April 2021, India exported just 2,42,857  tonnes of wheat and the report also said that it could rise further. Where is this wheat headed, it headed to all the parts of world to South Asia, to SouthEast Asia, Asia, Africa, Europe, West Asia basically Indian wheat is averting a global food crisis, some new buyers have also emerged like Egypt and Turkey, neither country has ever bought Indian wheat. Turkey has ordered 15 thousand tonnes of wheat from India. 

For Indian farmers this is great news, finally their production is becoming global. It could be India’s chance to capture a good chunk of the wheat market especially in Africa and West Asia.  These countries need cheap and good quality wheat. India checks both the boxes. 

Can India sustain this? 

This question is asked because the intense heat wave is sweeping through India that could produce wheat production. India was expecting to produce 111 million tonnes of wheat by June. The forecast has been slashed, the new one is 105 million. So productivity is one issue, the other is price, wheat prices have risen 15-20% in the last few weeks. 

Wheat is the second most consumed food grain in India after rice so if wheat is more expensive, it would be very difficult for us. There is no need to panic. India’s wheat stock is 19 million metric tonnes, the buffer norm is 7.4 million, the stock is sufficient so there is no immediate wheat crisis in India but don’t discount the risk. 

Written By: Ashi Dubey

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