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India’s wheat exports to reach record high this fiscal on rising demand.
Jan 27, 2022

India’s wheat exports are likely to rise to a record high of between 6.5 million tonnes (mt) and seven mt this fiscal on the back of good demand for countries in South Asia and South-East Asia regions. 
'We have exported 4.5 mt of wheat by December. We are exporting 5-6 lakh tonnes of wheat every month and this leaves a possibility of additional shipments of 1.5-2 mt. Exports could be 6.5-7 mt,' said Nitin Gupta, Vice-President, Rice and Grains, Olam Agro India Ltd. 
According to the Agriculture and Processed Food Products Export Development Authority, wheat exports during the April-November period of the current fiscal were 4.11 mt, valued at Rs8,547.58 crore. Compared with this, total wheat exports last fiscal were only 2.08 mt, valued at Rs4,033.81 crore.
In 2012-13, India exported 6.51 mt of wheat, earning Rs10,529 crore, while in 2013-14, it shipped out 5.57 mt of grain, fetching Rs9,277.65 crore. Earlier this month, the US Department of Agriculture raised its estimates of India’s wheat exports this fiscal to 6.5 mt 'due to strong export demand combined with competitive Indian wheat prices in neighbouring markets'.
'India is exporting to Sri Lanka, the Philippines, Bangladesh in the region. Indian wheat is currently priced at $300-305,' said Olam India’s Gupta. Wheat export prices had touched $320 in December, but Australians offering wheat whose quality had been affected at a lower price proved to be a disincentive.
According to the International Grains Council (IGC), Argentina is currently quoting $304 a tonne for upstream river delivery of its wheat, while France is quoting $324 for its Grade I wheat. US’ soft red winter wheat is ruling at $347 and hard red winter wheat at $397 a tonne. The IGC wheat sub-index is up 28 per cent year-on-year at 295. 
'The advantage India enjoys is that Australia is oversold until March and any country in the region wanting to buy during this period will have to look at India only,' said Gupta. 
Russia-Ukraine standoff
'Even otherwise, Australia has logistics problems since it is not on the mainstream navigation route of ships. Ships have to deviate from the mainline to go to Australia,' said S Chandrasekaran, a New Delhi-based trade analyst
In the case of India, if ships carry wheat to Africa or South-East Asia, they can return carrying minerals or coal or any such commodity, which is not the case with Australia, he said. 
This is one reason why India could quickly achieve record wheat exports this fiscal, while any intensification of the Russia-Ukraine conflict could also help Indian wheat exports. 
'But you have to keep in mind that shipping charges will also rise in the region in the event of any conflict,' Chandrasekharan said. 
'Such a conflict will definitely help India, which is in a sweet spot with regard to wheat exports,' said Olam India’s Gupta. 
Production prospects
Another advantage that India will enjoy after March is that the new wheat crop will hit the market. 'No other country’s wheat will arrive before the end of the first half of this calendar year. So, India will be the only source for wheat till then,' Gupta said. 
The USDA said India’s wheat exports will be helped by a record wheat crop of 109.5 mt this season (July 2021-June 2022). According to the fourth advance estimate of the Ministry of Agriculture, wheat production last season was estimated at 109.52 mt. 
'India’s wheat crop is good with the current winter weather helping production further. Wheat production could be 105-108 mt,' Gupta said. 
The crop estimate comes despite the area under wheat dropping this year to 340.82 lakh hectares (lh) from 345.14 lh a year ago.
The record exports will leave India’s ending wheat stocks lower at 23 million tonnes, the USDA said. FCI data showed that as of January 1, wheat stocks were down at 33.01 mt compared with 34.29 mt a year ago. On April 1 last year, wheat stocks with FCI were 27.3 mt. 
Besides exports, free distribution of 5 kg wheat until March this year to the people below the poverty line to overcome any difficulty they face on account of the Covid pandemic has also resulted in the stocks dropping. The foodgrain is distributed under the PM Garib Kalyan Anna Yojana.