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Domestic wheat prices fall up to 8 per cent after India imposes export ban: Details

The drop in wheat prices was seen in response to the Government order imposing restrictions on export owing to multiple reasons, including hoarding of Indian wheat by China and lesser wheat production compared to previous years.

Following the restrictions imposed by the Government of India on wheat export, the price of wheat is coming down for the consumers. As per reports, the wheat price has declined up to 8% to Rs 2,125 per quintal from the previous price which was Rs 2,325 per quintal. The price drop was seen in response to the Government order imposing restrictions on wheat export owing to multiple reasons, including hoarding of Indian wheat by China and lesser production of wheat compared to previous years.

In Punjab and Haryana, the procurement is almost complete. A few farmers reportedly sold their produce at Rs 2,020 per quintal, which was a little above the MSP. Anjani Agarwal, president of Roller and Flour Millers Federation of India, said in a statement that the timely ban on wheat export would increase domestic availability. He said, “The decision to ban wheat export was timely, and it would increase domestic availability of grain and prices would soften.”

The global wheat market is struggling to meet the demand amid Russia’s ongoing military action against Ukraine. Notably, the government has not put any restrictions on shipments where the export of wheat was committed by the Indian government under a bilateral understanding with neighbour countries and vulnerable nations to meet their food security needs. Also, the shipments under transitional arrangements where the letters of credit have been issued before the ban would be allowed.

Earlier, the Flour millers’ association RFMFI welcomed the decision of the government to ban wheat export. Notably, Aggarwal had said that RFMFI had written to the government to regulate export. He said, “It is a very good decision by the Government at this stage, as this will prevent unnecessary panic in the country about wheat supply and prices.”

He added that the price of wheat and wheat flour would get stable after the ban. It was expected to sharply rise due to less production. He said, “Atta (loose) prices are ruling at Rs 26-28 per kg, while packaged Atta prices stood at Rs 28-30 per kg. The prices of atta could have risen to Rs 40 per kg or even more. Prices will stabilise now.”

Govt announced relaxation

On May 17, the Government of India announced relaxation in its order restricting wheat exports. The government decided to allow the export of the consignments that have been handed over to Customs for examination and registered into their systems on or prior to May 13, as per the news agency ANI.

The China factor

The government sources speaking to OpIndia also confirmed that there is also a China factor behind the sudden decision to ban the export of wheat.

The senior officials in the Ministry of Commerce and Industry said that there is a sudden shortage of wheat worldwide, and China is using this opportunity to hoard wheat. They added that China is importing wheat on a large scale to store it to disrupt the global market soon.

With India continuing to flood international markets with wheat, it will lead to higher purchases by the Chinese, especially the Indian wheat. This will only aggravate the problem as China will dictate the supply of wheat at a time when there is a glut in the supply. It is notable that India is the second-largest producer of wheat, while China tops the chart.

Considering the strategic objectives, the Government of India has taken preventive steps to stop China from hoarding Indian stock and has decided to ban wheat exports. The prudent step by the Modi government is being hailed as pro-poor as this will only benefit the poor and ensure affordable prices of wheat in the domestic market.

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OpIndia Staff
OpIndia Staffhttps://www.opindia.com
Staff reporter at OpIndia

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