India Imposes Soft Restrictions on Flour While Continuing Wheat Export Discussions

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Jul 12, 2022 | Agricultural Markets

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India imposed restrictions on export shipments of Wheat Flour (Atta), Refined Flour (Maida), and Semolina (Rava/Sirgi) in order to contain prices rise. Exporters of these products will now need permits from the inter-ministerial committee on export shipments from July 12, per the order issued by The Directorate General of Foreign Trade.

The export policy on Wheat Flour (Atta) remains free, but exports will be subject to the recommendation of the inter-ministerial committee. The new approval is also applicable for Wholemeal Atta and resultant Atta. Meanwhile, the Directorate will reveal the necessary modalities regarding the quality of Wheat Flour later. In May, India amended the export policy of Wheat by placing its export under the “prohibited” category. 

India has kept its Wheat export options open to meet the food security requirements of vulnerable countries facing a food crisis on a government-to-government contract basis. The requests of many countries to import Wheat from India are being processed at the Government level.

Local pricing support 

Shri M. Angamuthu, Chairman of the Agricultural and Processed Food Products Export Development Authority-APEDA, said: “Wheat farmers have benefited immensely in terms of procurement at Minimum Support Price (MSP) by Government agencies while selling a significant part of their Wheat production to private traders at prices much higher than the MSP.” 

The Government has permitted them to purchase Wheat at MSP in all the major Grain-producing states, including Punjab, Haryana, Uttar Pradesh, Madhya Pradesh, and Rajasthan. In contrast, private traders in several secondary wholesale markets are allowed to sell their Wheat at a price higher than the MSP.

It is reported that during the current marketing season (Year 2022-23), farmers sold their produce at an average rate of Rs 2150 per quintal. The government extended the procurement season to ensure that farmers with surplus Wheat are not adversely affected due to export regulations. The extension of the procurement season facilitated farmers who had not participated in the earlier public procurement at procurement centers to sell Wheat to the Food Corporation of India and state procurement agencies.

Changing export market pattern

According to the AgFlow data, South Korea (135,500 tons) was India’s leading Wheat export destination in the shipments during March-June, followed by Djibouti, the Philippines, and China. In May, FOB prices for Indian Wheat (Milling) were approximately 350 USD/mt, while EXW Wheat price for feed was 283 USD/mt.

Wheat export markets by tons

As per the Directorate General of Foreign Trade estimates, India exported a record 7 million tons of Wheat in 2021-22, valued at USD2 billion. Over 50% of the total export in the last financial year was shipped to Bangladesh, while India entered new Wheat markets such as Yemen, Afghanistan, Qatar, and Indonesia. 

India is now in the last talks to launch export to Egypt as the APEDA urges exporters to register with Egypt’s public procurement agency (General Authority of Supplies and Commodities) to facilitate it. Export discussions are ongoing with Bosnia, Iran, Sudan, Nigeria, and other governments. In parallel, the country also started to send trade representatives to 9 nations, including Morocco, Tunisia, Algeria, Lebanon, Turkey, and Thailand, to explore opportunities.  

Accordingly, Railways are directed to have sufficient rakes available to meet any immediate demand for additional Wheat transport. Moreover, Port authorities have been asked to augment the dedicated number of terminals and sufficient containers for Wheat.

To ensure seamless quality certification of products to be exported, APEDA has recognized 220 labs across India to provide testing services for a wide range of exporters’ products. Also, the Authority assists in upgrading and strengthening recognized laboratories for export testing and residue monitoring plans.

 

 

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