DGFT has issued yet another notification related to wheat and wheat derivatives exports. This notification issued on 8th August 2022 is third notification in four months. First notification that came into effect on 13th May 2022 shifted Wheat Export from free category to prohibited category banning wheat exports from Indian shores with some exceptions. This was done giving the reason that food security of Indians was under threat. Real reason was soaring wheat and wheat flour prices in domestic market. But this step of GOI didn’t provide desired results it seems so DGFT came up with another notification issued on 6th July 2022. 6th July notification was more a reaction to unusually high wheat flour exports in the aftermath of wheat export ban. Some wheat exporters developed a very novel idea of bypassing the wheat export ban by converting wheat stocks into wheat flour stocks and exporting, alarming the government. Third notification which is basically subject of this discussion has been issued to diversify the second notification.
Issue date of third notification is 8th August 2022. This notification restricts export of wheat flour, Maida (refined wheat flour), Sooji (Samolina), Wholemeal atta and Resultant atta. Harshness of restriction imposed by this notification is a notch higher then second notification (dated 6th July 2022) restricting wheat flour exports. How is 6th July notification harsher then 8th August notification? Main difference between the two notifications is that 6th July notification doesn’t make issuance of quality certificate by EIC (Export inspection council) necessary for export but 8th August notification does that.
6th July Notification VS. 8th August Notification
- First and foremost difference is that 6th July notification restricts export of wheat flour only. That means shipments of only wheat flour needed recommendation of inter-ministerial committee (IMC) on wheat export. On the other hand 8th August notification restricts export of other wheat derivatives like Samolina (Sooji), Refined wheat flour (Maida), Wheatmeal atta and Resultant atta also.
- Second difference is related to quality certificate. There is absolutely no mention of quality certificate in 6th July notification. In 8th August notification quality certificate finds special mention. Notification mandates that apart from recommendation by inter-ministerial committee on wheat exports, quality certificate issued by EIC (Export inspection council) or its EIAs is necessary for export.
Necessity of series of notifications related to wheat and wheat derivatives exports is difficult to understand for a layman who buys wheat and wheat flour at high prices but doesn’t feel that wheat prices are particularly on fire. After Russia waged war against Ukraine, wheat from Russia and Ukraine got blocked. Russia and Ukraine produces 30% of total wheat produced globally and blockage of supplies from these countries played havoc with global wheat prices. High global wheat prices got reflected in Indian wheat prices too and as a kneejerk reaction Indian government banned wheat exports through 13th May notification. Wheat flour restriction followed as in the aftermath of Wheat Export Ban unusual surge in wheat flour ban was seen. This was done through 6th July notification. 8th August notification, which is subject of this discussion, is meant to diversify restriction imposed by 6th July notification.