Government's decision to restrict wheat exports last month was primarily aimed at meeting domestic demand while protecting farmers' income, according to M Angamuthu, Chairman of APEDA. He stated that India has kept its wheat export options open for those developing countries in order to meet their food security needs following the announcement of wheat shipment restrictions last month.
Several countries' requests to import wheat from India are being processed at the government level. Wheat farmers have benefited greatly this year from procurement by government agencies at the Minimum Support Price (MSP), while a significant portion of commodities has been sold to private trade at significantly higher prices.
The decision to ban wheat export was made to ensure that wheat was available for the domestic supply chain. The sudden increase in exports in April raised concerns about domestic price stability and supply, prompting the government to take 'regulatory' measures such as restricting wheat export.
The global wheat market is currently volatile, with prices remaining elevated due to a supply shortage caused by the Russia-Ukraine conflict.
Keeping farmers' interests in mind, the government allowed them to sell their wheat at higher prices above MSP to private traders across several mandis, in addition to procuring wheat at MSP across all key grain-growing states such as Punjab, Haryana, Uttar Pradesh, Madhya Pradesh, and Rajasthan.
Higher farmer remuneration did not result in higher wheat prices for consumers due to administrative measures such as wheat export regulations and increased wheat availability for the domestic supply chain, according to Angamuthu.
The Centre has been very prudent in balancing the interests of farmers and consumers at the same time. The goal of the Government of India's policy is for farmers to receive higher remuneration for their produce, and the Centre's decision aided the majority of farmers.
According to reports, farmers sold their produce at an average price of Rs 2150 per quintal during the current Rabi marketing season (2022-23), compared to the MSP of Rs 2015.
While restricting wheat exports on May 13, the Commerce Ministry stated unequivocally that wheat exports would be permitted under the government-to-government contract and to any other vulnerable country facing a food crisis.
Piyush Goyal, Union Minister of Commerce and Industry, Consumer Affairs, and Food and Public Distribution, recently stated that India has traditionally not been a grain exporter. "Our farmers toiled and ushered in the green revolution, and India's wheat production has been primarily for its own consumption," Goyal said at the World Economic Forum in Davos.
Despite being the world's second-largest wheat producer, India has been a minor player in global wheat trade, whereas the country accounts for more than 45 percent of global rice trade. In light of inflationary concerns, the government chose to limit wheat exports in order to protect food security.
According to the Directorate General of Foreign Trade estimates, India exported a record 7 million tonne (MT) of wheat in 2021-22, valued at $ 2.05 billion. In the previous fiscal year, approximately half of the total shipment was exported to Bangladesh.
Until 2020-21, India was a minor player in the global wheat trade. In 2019-20 and 2020-21, India could export only about 0.2 MT and 2 MT of wheat, respectively.
The government regulated wheat export beginning May 13, 2022, altering market dynamics by preventing speculative wheat trading and slowing the inflationary trend of wheat and products made from it in the domestic market.
The government extended the procurement season to ensure that farmers with surplus wheat are not negatively impacted by export regulations. This extension allowed farmers who had previously not participated in public procurement but were holding wheat stocks to come to purchase centres and sell wheat to Food Corporation of India and state procuring agencies.
To alleviate the sufferings of farmers in Punjab and Haryana caused by a fall in wheat crop yield due to the early onset of summer and an untimely heat wave, and to increase procurement for the central pool, the GOI increased the permissible limit of shriveled grains from 6% to 18% for Punjab and Haryana.
