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UAE to suspend export of Indian wheat for four months

The resolution applies to all wheat varieties (spelt), namely hard, ordinary, and soft wheat, and wheat flour (spelt flour)…reports Asian Lite News

The Ministry of Economy has issued cabinet resolution No.72 of 2022, which imposes a moratorium on the export and re-export of wheat and wheat flour originating from the Republic of India, including free zones, for a period of four months starting from 13th May, 2022.

The resolution applies to all wheat varieties (spelt), namely hard, ordinary, and soft wheat, and wheat flour (spelt flour).

The Ministry of Economy explained that this decision comes in view of the international developments that have affected trade flows and in appreciation of the solid and strategic relations that bind the UAE and India, especially after the signing of the Comprehensive Economic Partnership Agreement between the two countries and the Indian government’s approval to export wheat to the UAE for domestic consumption.

The Ministry explained that the companies wishing to export/re-export wheat and wheat flour varieties of Indian origin, which were imported into the country before 13th May, must submit a request to the Ministry to obtain permission to export outside of the UAE. They must submit all documents and files that help verify the data regarding the shipment in terms of its origin, date of transaction, and any other documents that the Ministry may require in this regard.

The Ministry also indicated that in the case of wheat and wheat flour products of non-Indian origin, companies wishing to export/re-export it may do so after applying to the Ministry for export permission outside the country. This application must also be supported by all documents and files that help verify the origin of the shipment to be exported/re-exported.

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It noted that the export permit issued to companies is valid for 30 days from the date of issuance and must be submitted to the relevant customs department in order to complete the procedures for exporting the shipment out of the UAE.

The application must be submitted to the Ministry of Economy through e-mail antidumping@economy.ae or directly by visiting the Ministry headquarters.

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Export ban shakes world markets, wheat prices up 6%

The unexpected ban by India, which accounts for about 5 per cent of world wheat exports, stoked prices further. In Chicago, futures rose 5.9 per cent to $12.47 a bushel on Monday, the highest in two months…reports Asian Lite News

India’s ban on wheat exports Saturday fuelled international prices by almost 6 per cent a bushel (60 pounds or one million kernels or 27.21 kg) when global markets opened Monday. Locally, prices dropped sharply by 4-8 per cent in different states — Rs 200-250 a quintal in Rajasthan, Rs 100-150 a quintal in Punjab, and about Rs 100 a quintal in Uttar Pradesh.

With the February 24 invasion of Ukraine by Russia and the supply disruption that followed, global wheat prices jumped over 60 per cent in 2022; just Russia and Ukraine together account for almost a third of world wheat exports.

The unexpected ban by India, which accounts for about 5 per cent of world wheat exports, stoked prices further. In Chicago, futures rose 5.9 per cent to $12.47 a bushel on Monday, the highest in two months. The closing price in the previous trading session on May 13 — the day India imposed the ban — was $11.77 a bushel.

According to the Indian government’s Department of Commerce portal, the country exported 66.41 lakh tonnes of wheat in the first 11 months (April 2021 to February 2022) of financial year 2021-22 (1 tonne is 1,000 kgs or 2,204.6 pounds). This data conforms with the latest US Department of Agriculture’s May 2022 report, which estimates wheat exports from India in the 12 months from July 2021 to June 2022 at 10 million metric tons (1 ton is 2,000 pounds). The total world wheat exports during the period are estimated at 201.5 million metric tons.

In the current financial year – April 2022 to March 2023, the Indian government estimates about 45 lakh metric tonnes of wheat to have been contracted for exports. Of this, 14.63 lakh metric tonnes have been exported in April 2022 alone, substantially higher than 2.43 lakh metric tonnes in the same month last year. Besides, 95,167 metric tonnes atta have been exported in April this year, almost four times more than 25,566 MT in April 2021.

The Group of Seven (G-7) countries too expressed disappointment on India’s decision. After a meeting of G-7 agriculture ministers in Germany, German Agriculture Minister Cem Ozdemir said the export restriction would “worsen the crisis”. “If everyone starts to impose export restrictions or to close markets, that would worsen the crisis,” Ozdemir said at a press conference in Stuttgart on Saturday.

India defended the decision. The ban was “essentially in view of the price rise”, Union Food Secretary Sudhanshu Pandey said Saturday during a media briefing. Retail inflation has been ruling over 6 per cent for four straight months in calendar year 2022, with the print for April soaring to 7.79 per cent, much higher than the upper band of RBI inflation target of 6 per cent. In the Consumer Price Index, wheat/ atta from PDS has a weight of 0.17 and wheat/ atta from other sources has a weight of 2.56.

Research analysts said the impact of India’s export ban would be felt disproportionately by low income developing countries. In a note after the ban, Nomura Global Markets Research pointed out that except India and Australia, most Asian economies depend on imported wheat for domestic consumption and are at risk from higher wheat prices globally, even if they do not directly import from India.

US hopes India will drop restrictions

Washington hopes that India will drop its restrictions on wheat exports after hearing at the United Nations (UN) Security Council from other countries about the looming food crisis, according to Linda Thomas-Greenfield, the US Permanent Representative to the UN.

“India will be one of the countries participating in our meeting at the Security Council, and we hope that they can, as they hear the concerns being raised by other countries, that they would reconsider that position,” the Cabinet official said on Monday previewing the US initiatives on food security in the wake of the Russian invasion of Ukraine.

Answering a reporter’s question about India restricting some wheat exports, she added, “We’re encouraging countries not to restrict exports because we think any restrictions on exports will exacerbate the food shortages.”

Russia and Ukraine accounted for nearly 30 per cent of the global wheat exports and the war has disrupted the supplies putting many countries at risk.

India, which is the world’s second-largest wheat grower and has a big stockpile, ordered an end to most purely commercial wheat transactions while leaving room for some exports to neighbouring countries and governments of countries in need.

The government notification of the revised policy on Friday said the exports were banned “in order to manage the overall food security of the country and support the needs of the neighbouring and other vulnerable countries”.

India’s Commerce Secretary, B.V.R. Subrahmanyam on Sunday said private companies would be allowed to meet previous commitments they have made for exports.

Explaining the restrictions, he added that New Delhi did not want an unregulated export of wheat that could lead to it getting “hoarded and is not used for the purpose which we are hoping it will be used for — which is serving the food requirements of vulnerable nations and vulnerable people”.

The main factor behind the reversal of Indian policy on wheat exports is the extreme heatwave that swept through some of the wheat-producing areas creating fears that the output could fall by as much as 5 per cent.

The US, which is the Security Council’s President for May, has urged for ‘Days of Action for Food Security’.

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Egypt, world’s largest wheat importer, wants to buy Indian grain

Besides Egypt, the other large wheat importing countries are China, Turkey, Nigeria and Indonesia…reports Asian Lite News

After Egypt, many more countries are now looking to purchase wheat from India. Egypt, the world’s largest importer of wheat, is already looking to source the cereal from India after the Russia-Ukraine war dented supplies. Most of Egypt’s wheat until now came from Ukraine. Several other countries from Europe and West Asia are also expected to soon start purchasing Indian wheat.

Besides Egypt, the other large wheat importing countries are China, Turkey, Nigeria and Indonesia.

After exporting a record 7.85 million tonnes of wheat in 2021-22, India’s worldwide supply of the grain could touch 20 million tonnes this financial year amid rising concerns over food security as the Russia-Ukraine crisis deepens.

Russia and Ukraine accounted for about a third of the total global wheat exports estimated at around 180 million tonnes.

“For India, new markets for wheat exports are opening up. Egypt has already placed orders..we are expecting many new markets to start buying the grain from us. Many countries which have been already purchasing Indian wheat could now source a larger amount of the grain,” Anil Monga, managing director, Emmsons International that deals in trading of agro products, told India Narrative. Monga added that the trend could continue in India’s favour as Ukraine will not be in any position to immediately resurrect its agricultural land after the war ends.

However, for the wheat growers the current heat wave that has gripped north India is posing serious challenges. Farmers fear that the sharp increase in temperature would dent agriculture productivity.

“Production may drop by 10-15 per cent due to this heat wave but despite that we have more that sufficient stocks to protect our own people and expand exports,” Anil Ghanwat, senior leader of Shetkari Sangathana, a Maharashtra based farmers union.

However, surplus stocks of the previous years are still lying with the Food Corporation of India (FCI).

“Though we don’t see any threat related to food security we hope this is not the case next year as well,” Ghanwat said.

The Russia-Ukraine war has choked vital supply chains globally.

Later this month, US Secretary of State Antony Blinken is expected to hold a ministerial-level meeting in the United Nations on action for global food security.

According to Eurasian Research Institute, wheat provides more than 35 per cent of the cereal calorie intake in the developing world, 74 per cent in the developed world and 41 per cent globally from direct consumption.

Almost 70 per cent of wheat is used as food, while the rest is used as feed for livestock and industrial processing.

The World Economic Forum said that between 720 million and 811 million people in the world faced hunger in 2020. The Covid 19 pandemic, climate change and conflict are among the main drivers of global food insecurity.

Almost 40 per cent of Ukraine’s wheat and corn exports go to the Middle East and Africa, which are already grappling with hunger issues. Increased food prices and shortage could even stoke social unrest, the WEF warned.

India’s rice exports have already surged in the last two years. Its markets include Bangladesh, China, Guinea, Vietnam and Malaysia among others. Rice exports in the current financial year is also set to be robust. “We have already got orders and we are hoping that this year will also be a good one,” Monga said.

“Indian farmers are feeding the world…. Our farmers have ensured our granaries overflow & we are ready to serve the world,” Union Minister Piyush Goyal tweeted a few days earlier.

(The content is being carried under an arrangement with indianarrative.com)

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Goyal says Egypt approved India as a wheat supplier

The development comes as the global supply of wheat is getting constrained due to the Russian-Ukrainian war…reports Asian Lite News

Egypt has approved India as a wheat supplier, said Union Minister Piyush Goyal on Friday.

“Indian farmers are feeding the world,” tweeted the Minister of Commerce and Industry, Consumer Affairs, Food and Public Distribution and Textiles.

“Egypt approves India as a wheat supplier. Modi Govt. steps in as world looks for reliable alternate sources for steady food supply.”

“Our farmers have ensured our granaries overflow & we are ready to serve the world.”

The development comes as the global supply of wheat is getting constrained due to the Russian-Ukrainian war.

Both the nations are major global producers of wheat.

On the other hand, Egypt is a major wheat importer in the world.

Recently, India has diversified its wheat exports market.

Less MSP procurement

The Ukraine-Russia war-led speculation surge for Indian export of wheat may bring down government procurement under Minimum Support Price (MSP) to 30-35 million metric tonnes (MMT) against the targeted 44 MMT this year and high vegetable oil prices may shift some unirrigated rice area to oilseeds, a US Agriculture Department report said.

The US Department of Agriculture’s ‘Grain and Feed Annual – 2022’ report for India, released late on Tuesday night (India time) dwells on market possibilities, sowing area, and record productions.

Pointing out that India is heading for a record wheat harvest this marketing year (MY), it said the Foreign Agricultural Service, New Delhi forecasts MY 2022/2023 (April-March) wheat production at a record 110 from 30.9 million hectares, and up from last year’s record 109.6 MMT from 31.1 million hectares.

“India is heading for a record wheat harvest this coming marketing year (MY) thanks to highly favorable weather conditions in the major wheat growing areas. If good weather conditions hold through the harvest (April-May), FAS New Delhi (Post) forecasts MY 2022/2023 (April-March) wheat production at a record 110 million metric tons (MMT) from 30.9 million hectares, and up from last year’s record 109.6 MMT from 31.1 million hectares,” it said.

It blamed global prices fueling domestic pricing and receding fear of new Covid-19 disruptions to claim that government procurement is set to swing into reverse in 2022/23.

“In February 2022, but just prior to Russia’s invasion of Ukraine, the Indian government set the 2022/23 procurement target at 44 million metric tons. With speculation rampant about a surge of demand for Indian export wheat, due to high global prices, sources see the government’s minimum support price (MSP) procurement dropping to 30-35 million metric tons,” it said.

India’s 2021/22 (October 2021-January 2022) total rice exports are officially estimated at 6.8 MMT, up from 5.7 MMT during the same period last year on increased coarse rice exports to Bangladesh, China, and African countries, the report said.

“Assuming no significant change in the current price parity for Indian rice, 2021/22 rice exports are expected to reach 20.5 MMT, and 2022/23 exports are forecast at 18 MMT.”

Warning that high vegetable oil prices may shift some un-irrigated rice area to oilseeds, the report said that timely, well-distributed 2022 monsoon rains are critical for forecast area planted and yields as 40 per cent of the rice area is rain-fed (un-irrigated).

Despite 2021 monsoon rains supporting a record corn harvest, 2021/22 total coarse grain production is estimated lower at 49.9 MMT due to lower production of other coarse grains, the report said. Timely planting under above normal 2022 monsoon rains and favorable weather conditions for the winter planted rabi season corn boosted yield prospects with 2021/22 corn production estimated at a record 32.5 MMT.

“However, production of millet, sorghum, and barley are estimated down from last year on lower plantings (area shifted to rice and pulses),” it said.

The report also pointed out that despite the record harvest, 2021/22 prices are on the upward trajectory.

“Prices have gone up further in the last three months in response to global prices spiking due to the Russian invasion of Ukraine. Despite India’s export competitiveness, Post forecasts 2022/23 exports lower at 2.4 MMT and imports at 100,000 MT on forecast tight domestic supplies and strong demand,” said the report that came with a disclaimer that it contained assessment of commodity and trade issues made by the USDA staff and not necessarily statements of official US government policy.

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Indian wheat eyes new markets

The export of wheat recorded a huge surge at $1,742 million during April-January 2021-22, growing 387 per cent over the corresponding period in 2020-21 when it touched $340.17 million….reports Asian Lite News

 Amidst a record surge in wheat exports in the current fiscal and the precarious situation arising out of the Ukraine-Russia war, India is looking forward to starting wheat export to several new countries beyond its Asian/South Asian neighbours.

“India is in final talks to start wheat export to Egypt, while discussions are going on with countries such as Turkey, China, Bosnia, Sudan, Nigeria, Iran, etc to start wheat export,” a meeting of the stakeholders called by the Agricultural and Processed Food Products Export Development Authority (APEDA) was informed.

The export of wheat recorded a huge surge at $1,742 million during April-January 2021-22, growing 387 per cent over the corresponding period in 2020-21 when it touched $340.17 million.

India has reported a wheat export worth of $2352.22 mn in the last three years, including the first 10 months of current fiscal 2021-22. In 2019-20, the wheat export was worth $61.84 mn which rose to $549.67 mn in 2020-21, a statement from the Ministry of Commerce and Industry said.

Though India is not among the top 10 wheat exporters in the global trade, its rate of growth in exports has surpassed that of the other countries, indicating the rapid strides it is taking in reaching new markets worldwide, the Centre claimed and added, “India is in final talks to start wheat export to Egypt, while discussions are going on with countries like Turkey, China, Bosnia, Sudan, Nigeria, Iran, etc to start wheat export.”

Wheat. (File Photo: IANS)

India’s wheat exports are mainly to neighbouring countries with Bangladesh having the largest share of more than 54 per cent in both volume and value terms in 2020-21. In 2020-21, India entered new wheat markets such as Yemen, Afghanistan, Qatar and Indonesia.

According to data by Directorate General of Commercial Intelligence and Statistics (DGCIS), the top 10 importing countries for Indian wheat in 2020-21 were Bangladesh, Nepal, the United Arab Emirates, Sri Lanka, Yemen, Afghanistan, Qatar, Indonesia, Oman and Malaysia. Top ten countries accounted for more than 99 per cent share in India’s wheat exports in 2020-21 in both volume and value terms.

Given the bumper wheat production estimation, the APEDA – at the meeting held on March 17 called by M. Angamuthu, chairman, APEDA — asked key stakeholders in the value chain for promoting exports to those countries, which have a huge shipment potential and asked all the stakeholders to strengthen its infrastructure for facilitating hassle free wheat export.

The Ministry of Commerce and Industry directed to scale up shipments in order to alleviate any global supply chain disruptions in view of the geopolitical situation. The meeting had participation of key stakeholders such as traders, exporters, port officials, policy influencers from the Ministries of Food & Consumer Affairs, Railways and officials from various state governments.

At the meeting, the Railways assured to make available sufficient rakes to meet any immediate demand for additional wheat transport. Port authorities have also been asked to augment dedicated terminals along with dedicated containers for wheat.

India accounts for even less than one per cent in world wheat export. However, its share has increased from 0.14 per cent in 2016 to 0.54 per cent in 2020. India is the second largest producer of wheat with a share of around 14.14 per cent of world total production in 2020.

India produces around 107.59 Million MT of wheat annually with a large chunk of it going towards domestic consumption. Major wheat growing states in India are Uttar Pradesh, Punjab, Haryana, Madhya Pradesh, Rajasthan, Bihar and Gujarat.

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Essential commodities will be hit by Ukraine conflict

Imports are a relatively cheaper option as India’s sunflower seed production is constantly hovering close to 60,000 tonnes for the last couple of years…reports Rohit Vaid

Continuing hostilities between Russia and Ukraine are set to impact the domestic selling prices of wheat and sunflower oil.

Both countries produce massive quantities of wheat, while Ukraine is one of the world’s largest sunflower seeds exporters.

Though India is self-sufficient in wheat, it does import some quantities of high grade grain, analysts said.

Moreover, the reduction in Russian and Ukrainian wheat in the international market will give an attractive opportunity for Indian exporters, thereby slightly pushing up domestic prices.

Lately, domestic wheat prices have seen an increase of Rs 300 per quintal to Rs 2,300 per quintal.

This trend is likely to continue till the arrival of new supply from April onwards.

However, in terms of sunflower seeds, India is heavily dependent on Ukrainian and Russian imports.

Imports are a relatively cheaper option as India’s sunflower seed production is constantly hovering close to 60,000 tonnes for the last couple of years.

In this case, India can fulfil its requirement via crude palm oil (CPO). However, the prices of CPO have also risen recently.

These agro-commodities price trends, though at nascent stages, will push up inflation.

Already, India’s main inflation gauge — Consumer Price Index (CPI) — which denotes retail inflation, has crossed the target range of the Reserve Bank of India in January.

Besides, the rate of rise in the Consumer Food Price Index, which measures the changes in retail prices of food products, increased to 5.43 per cent last month from 4.05 per cent in December 2021.

The trend assumes significance as retail inflation rate crossed the target range of the Reserve Bank of India.

The central bank has a CPI target range of 2-to-6 per cent.

“Domestic wheat prices have increased by Rs 300 per quintal. The ongoing conflict between Russia and Ukraine will add pressure on the domestic prices,” said IIFL Securities VP, Research, Anuj Gupta.

“We expect the prices to remain elevated until fresh supplies come up.”

Kshitij Purohit, Lead of Commodities and Currencies CapitalVia Global Research, said: “Both wheat and sunflower seeds’ domestic prices are expected to see a rise due to the ongoing war between Russia and Ukraine. Wheat prices have risen by around Rs 300 per quintal. There has been an increase in prices of sunflower oil as well.”

“The rise in sunflower seeds’ prices have also pushed the CPO prices higher.”

Hetal Gandhi, Director, Crisil Research, said: “With the ongoing geo-political issues in these countries (Russia and Ukraine), India could expand its (wheat) exports to countries like Bangladesh, Egypt, Indonesia and African nations… We expect wheat prices to inch up over the next 3-6 months.”

“Over the next 3-6 months due to lower import of sunflower oil, Indian consumers may shift to soy and palm oil and hence, prices are expected to inch up for sunflower oil in the coming six months. How the political tensions pan out will determine prices over the long term.”

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Balochistan’s Chitral faces shortage of subsidised wheat

Bashir Hussain Azad, a resident of Zargarandeh village, said that the local mills had stopped releasing the flour to the market for the last two weeks, demanding a hike in the price…reports Asian Lite News

Amid rising inflation and food crisis in Pakistan, local flour mills in Balochistan’s Chitral have stopped releasing the subsidised wheat flour, demanding a hike in the price of the essential commodity.

The local residents have resented the non-availability of subsidised wheat flour in the bazaars as the local flour mills have stopped releasing the commodity over price issue, the Dawn reported.

Local customers told Dawn that they were getting the wheat flour ground by the local mills at Rs 2,200 per 40-kilogramme bag, but were now forced to purchase flour brought from other parts of the country at Rs 2,600 per 40kg bag.

Bashir Hussain Azad, a resident of Zargarandeh village, said that the local mills had stopped releasing the flour to the market for the last two weeks, demanding a hike in the price, reported Dawn.

He said the district administration had neither accepted the demand of the mill owner nor turned it down, with the result that the supply had been halted to the market.

The consumers said they were getting the wheat flour ground by the local mills at Rs 2,200 per 40-kilogramme bag, but were now forced to purchase flour brought from other parts of the country at Rs 2,600 per 40kg bag, reported Dawn.

Meanwhile, Dwan report said Arshad Hussain, District Food Controller of Lower Chitral, supported the demand of the mill owner and said that they were right in demand for raise in the flour price.

He said the local mills could not be treated like the mills in other parts of the country where only 60 per cent of fine quality flour was extracted from wheat, while in Chitral the ratio was 80 per cent, thus making the commodity costlier in the district, the Pakistani publication said.

The food controller said after rationalisation of the price based on the local conditions, he had sent his recommendations to the assistant commissioner for onward submission to the deputy commissioner for final notification.

Lower Chitral Deputy Commissioner Hasan Abid told Dawn that fixing the price of flour was beyond his authority, and he could only implement the prices fixed by the food department, reported Dawn.

He said he could cancel the licence of the mills if its owner did not accept the price fixed by the food department. (ANI)

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