India Signs Agreements to Export 5.5 lakh tonnes of Wheat to Asian Countries

Indian wheat exporters have signed contracts to export at least 5.5 lakh tonnes (lt) over the next few months, as nations in South Asia, South-East Asia, and West Asia look to New Delhi to meet their food and feed needs in the aftermath of the Ukraine-Russia crisis.

"From March to April, we have a demand for Indian wheat." Our exporters have agreed to ship 5.5 million tonnes. Under these agreements, exporters will ship both old and new crop," said Rajnikant Rai, Divisional Chief Executive, ITC Agri-Business.

Volatility in Market

"Russia and Ukraine account for 35-40% of global wheat exports," an ITC official said.

According to FAOSTAT, Russia exported 37.26 million tonnes (mt) of wheat and Ukraine exported 18.06 million tonnes (mt) of wheat in 2020, out of a total of 202.48 million tonnes (mt) exported by various countries, including India.

"The wheat market is volatile, with buyers and sellers waiting to see what happens." However, as the Ukraine crisis worsened, prices rose by $15-20 per tonne. "India has an advantage in that no other country's new crop arrives at this time of year," said Nitin Gupta, Vice-President, Olam Agro India Ltd.

Wheat prices in the global market are at a nine-year high, with rates fluctuating between $9 and $10 per bushel. On Tuesday, the Chicago Board of Trade quoted benchmark wheat futures at $9.75 per bushel or $358.24 (27,150) per tonne.

Korea Buying for Feed

"Over the last few months, we've seen strong demand for Indian wheat." "We are also achieving parity in grain shipping," said Mukesh Singh, Director of MuBala Agro.

According to Rai of ITC, countries in South Asia, West Asia, and even the Philippines in the South-East Asian region are interested in Indian wheat. "Even South Korea is buying Indian wheat for feed," he explained.

According to Olam's Gupta, India could easily ship out 3-4 mt by June of this year, especially since 5-6 lt are exported every month. "We exported nearly one million tonnes in December," he said.

According to data from the Agricultural and Processed Food Products Export Development Authority (APEDA), India exported 50.41 lt of wheat worth $1.43 billion from April to December of this fiscal year, up from 10.69 lt worth $278 billion lt the previous year.

Bangladesh- Biggest Buyer

Exports stood at 41.14 lt until November. Until November, the per-tonne realization was $280, but it increased to $285 in December. In the first nine months of this fiscal year, Bangladesh purchased 29.68 lt of Indian wheat, followed by Sri Lanka (4.04 lt), the UAE (3.69 lt), and the Philippines (2.96 mt).

Higher wheat exports this year have aided growers, with prices exceeding the minimum support price (MSP) of $1,975 per quintal announced for the rabi marketing season in 2021. The MSP has been raised to $2,015 this year.

"If the Ukraine-Russia conflict continues, Indian exports will benefit." Ukraine and Russia both have bumper wheat crops. However, if the current trend continues, exports will be good until June-July," Rai predicted.

"We'll have to keep an eye on the weather for the next 30 days." "If there is no rain, we will have a good crop," Rai predicted. Higher inventories with the Food Corporation of India also help Indian wheat exports (FCI). FCI had 28.27 mt of wheat on hand as of February 1, compared to 31.83 mt at the same time last year. It is currently estimated to be around 26 mt.