WHEAT EXPORTS

• Opinion-  India’s prospects for sustained wheat exports are limited. The surplus stocks are a fraction of the quantity exported annually by Russia and Ukraine.

2. Background

• Russia and Ukraine account for about 25% of the world’s wheat exports. However, Russia’s invasion of Ukraine and the subsequent Western sanctions against Moscow have curtailed wheat supplies drastically.
• As a result of the war, many countries which were sourcing wheat mainly from these two nations are now in a dire need of alternatives.
• India, the largest wheat producer after China, is reported to be eyeing the void.
• The government plans to allow increased exports to cash in on the higher price of wheat in the international market.
• With harvesting season (March to May) coinciding with the supply crunch, a bumper crop is also expected again this year.

3. International scenario of wheat supply

• More than a quarter of the world's wheat export comes from Russia and Ukraine.
• Russia is the world's largest exporter of wheat, accounting for more than 18% of international exports.
• In 2019, Russia and Ukraine together exported more than a quarter (25.4 %) of the world's wheat.
• The top five countries that exported the highest dollar value worth of wheat include Russia > United States > Canada > France > and Ukraine.

• Egypt is the world's biggest importer of wheat. 
• Cheap Indian wheat faces quality checks, the high freight cost for Egypt export-Latest scenario

• Turkey is also a big spender on Russian and Ukrainian wheat with 74% of its imports coming from those two countries in 2019.
• India is the second-largest producer of wheat with a share of around 13.5% of the world's total production.
• India produces around 107.59 MT of wheat annually while a major chunk of it goes towards domestic consumption.
• India accounts for even less than 1% of world wheat export. However, its share has increased from 0.14% in 2016 to 0.54% in 2020.
• Presently, India's central pool stands at 24.2 million tonnes, twice more than the buffer and strategic needs.

4. What does India aim at?

• India is now focussing on exporting wheat to many nations such as Egypt, Turkey, Nigeria, Algeria, West Asia, Indonesia, Vietnam, Sri Lanka, Bangladesh, Thailand, the Philippines, Morocco and Tanzania.
• To give impetus to the export promotion of wheat as well as to bring focus on the challenges and bottlenecks faced in production and export, APEDA has created a task group.

5. Current status of Indian wheat exports

• Wheat exports in the 2021-2022 financial year were estimated at 7.85 million tonnes, a quadrupling from 2.1 million tonnes in the previous year.
• Exports this fiscal year are expected to be almost 10 million tonnes worth $3 billion.

6. Steps were taken by India to facilitate exports

• The Commerce Ministry has put in place an internal mechanism to facilitate it and get the paperwork ready for the related sanitary and phytosanitary applications to help facilitate shipments.
• The railways are providing rakes on priority to move the wheat.
• The railways, ports, and testing laboratories are all geared up to meet the requirements.
• The Agricultural and Processed Food Products Export Development Authority (APEDA) and Ministry of Agriculture are sending delegations to several countries to resolve market issues.

7. What gives scope to India

• Competitive price
• Acceptable quality
• Availability of surplus wheat
• Geopolitical reasons

8. Requirements and status of wheat production in India

• Wheat is the main cereal crop in India. The total area under the crop is about 29.8 million hectares in the country.
• Indian wheat is largely a soft/medium-hard, medium protein, white bread wheat, somewhat similar to U.S. hard white wheat. 
• Wheat grown in central and western India is typically hard, with high protein and high gluten content.
• Wheat is grown in a variety of soils in India. Soils with a clay loam or loam texture, good structure and moderate water holding capacity are ideal for wheat cultivation. Care should be taken to avoid very porous and excessively drained soils.

9. Specificity in requirement

• Wheat: It is the second most important cereal crop. It is the main food crop, in the north and north-western part of the country.
• Climate: This rabi crop requires a cool growing season and bright sunshine at the time of ripening. It requires 50 to 75 cm of annual rainfall evenly- distributed over the growing season.
• Wheat Growing Regions: There are two important wheat-growing zones in the country – the Ganga-Satluj plains in the northwest and the black soil region of the Deccan. The major wheat-producing states are Punjab, Haryana, Uttar Pradesh, Bihar, Rajasthan and parts of Madhya Pradesh.
• Reason for India’s higher wheat exports: Due to surging international prices from Chinese stockpiling and ultra-low interest rates money increasingly finding its way into agri-commodity markets.
• Concerns: Indian wheat is still not competitive at the government’s minimum support price(MSP) of Rs 19,750 per tonne. The export price of wheat bought in Gujarat is around Rs 20,950 per tonne. That works out to $286 per tonne or $290-plus after adding exporter margins. The above price is higher than the $275-280 that major exporters such as Australia, France, the US, Russia and Canada quoted.
• Suggestions: This disadvantage can be overcome if wheat is sourced below MSP from Uttar Pradesh, Bihar, Gujarat and Maharashtra where not much government procurement happens.
  • The new crop arriving in these markets would be available at Rs 17,000-18,000/tonne. This wheat can be exported by rail rakes to Bangladesh or shipped to the Middle East (UAE, Oman and Bahrain) and Southeast Asia (Indonesia, Vietnam and Malaysia).

 Heatwaves may decrease wheat export