Government Bans Exports of More Wheat-Related Products

To combat rising prices ahead of the holiday season, the government has decided to restrict maida, semolina, and wholemeal aata exports. This follows a ban on wheat exports on May 13 and a ban on wheat flour (or atta) last week. However, the Directorate General of Foreign Trade (DGFT) stated that exports of these items would be permitted in limited circumstances, subject to government approval.

According to a DGFT notification, "the export policy of items (wheat or meslin flour, maida, semolina, wholemeal aata, and resultant aata) has been changed from free to prohibited." Rawa and sirgi are both types of semolina.

The provisions of the Foreign Trade Policy 2015-20 regarding transitional arrangements will not apply under this notification, according to the DGFT. Last week, Prime Minister Narendra Modi's Cabinet Committee on Economic Affairs (CCEA) approved a proposal to amend the policy of exempting wheat or meslin flour from export restrictions.

Atta exports for FY22 totaled 500,000 tonnes, but nearly 100,000 tonnes were shipped out each month following the May wheat export ban. As a result, the union government mandated in July that exporters of wheat flour and related products such as semolina, wholemeal atta, and 'resultant atta' obtain approval from an inter-ministerial committee (IMC).

Russia and Ukraine are the major wheat exporters, accounting for roughly one-fourth of global wheat trade. The war between the two countries has disrupted the global wheat supply chain, increasing demand for Indian wheat.

In April-July 2022, Indian wheat flour exports increased 200% over the same period in 2021. The increased demand for wheat flour in the international market resulted in a significant price increase in the domestic market.

"Rice prices are not rising significantly right now." "However, if there is a significant movement, we will consider prohibiting rice exports as well," a commerce ministry official said. However, experts have stated that, while there are key rice-growing regions where monsoon rains have been insufficient, resulting in subpar sowing, rains and reservoir levels are high.

"After a rocky start, rains are in excess (7% above normal), and more importantly, reservoir levels are elevated, 9% above last year, which was also above average." According to an HSBC report, "reservoir levels matter more than rains for India's food production and inflation, because reservoirs not only capture contemporaneous rains but also rain that has been captured in previous rain episodes."

According to Reuters, farmers planted paddy on 34.37 million hectares, an 8.3% decrease from the previous year. It cited farm ministry data from the previous week. India typically exports 5% and 25% broken rice, but demand for 100% broken rice has increased dramatically in recent months, particularly from drought-stricken China, according to exporters.