Located in Asia, India is the second largest wheat producer in the world. The country accounts for approximately 14% of the total wheat produced globally. However, despite bumper wheat harvest every year, owing to the high consumption needs of its billion-plus citizens exports a mere fraction of the total production to the global wheat market.
As a wheat exporter, India contributes a paltry 3% to the global wheat trade, and a major share of wheat produced is consumed domestically only. Although, that has changed in the aftermath of the Russia-Ukraine war.
The war between Russia and Ukraine has created a huge void in the global wheat market and benefitting from this, India’s wheat exports are set to rise. The Government of India is constantly pushing to fill the gap and as per analysis, India is set to export a record 7 million tonnes of wheat this year, 0.5 million tonnes higher than the previous high in 2012-13.
Russia-Ukraine War: A Blessing In Disguise For Indian Wheat Exports
Before the war, Russia and Ukraine together accounted for around 30% of the total global wheat exports and the war between the two biggest wheat producers and Wheat Exporters of the world has created a vacuum in the market and has consequently raised the demand for Indian wheat.
Riding on the back of strong demand, India exported record volumes of wheat last year forcing the GOI to impose a wheat ban to stabilize prices and ensure adequate supplies for domestic consumption. However, despite this, the government permitted wheat exports through Government to Government (G2G) deals, subject to necessary permissions.
Market analysts believe that the Russia-Ukraine war has raised the demand for Indian wheat and has presented India with a unique opportunity. With global wheat prices higher than the domestic support prices offered by the GOI, it is profitable for India to export bulk wheat and cash in on the opportunity.
Need To Exercise Caution
As demand for Indian wheat continues to surge in the aftermath of the Russia-Ukraine war and global wheat prices continue to hit record highs, India is likely to push its limit to export record volumes of wheat this year. Mr. Sudhanshu Pandey, Food Secretary said that the central government is pushing to fill the void created by the Russia-Ukraine war and is constantly engaging with diplomatic missions around the world to facilitate the same.
However, the efforts to boost India’s wheat exports should be exercised with caution to ensure that domestic prices remain stable. According to analysts, India requires to keep a close eye on wheat exports to ensure that wheat prices remain stable in the domestic markets.
The Bottom Line
The war between Russia-Ukraine has created a huge void in global wheat stocks and benefit from this, India’s wheat exports are set to rise. The GOI is making every possible effort in this regard and has asked diplomatic missions to facilitate outbound shipments of wheat. However, efforts should be exercised with caution to make sure that prices of wheat in the domestic market remain stable.
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