Wheat

Impact of India’s Grain Export Policy Changes on Singapore

Impact of India's Grain Export Policy Changes on Singapore

In a move to boost domestic supplies, the government of India imposed a 20 percent import duty on non-basmati rice except for parboiled rice. India also implemented restrictions on wheat export. These moves came into effect following a fall in the cropping area due to several rounds of heatwaves throughout the country and low rainfall. India being the largest rice exporter makes it the only source of grain for multiple countries. Any change in its trade policies reflects largely on the global market. One such country which took regular shipments from India is Singapore.

Singapore imports rice from its neighboring rice-producing countries like Vietnam, and Thailand along with India. Rice shipments to the city-state from Vietnam and Thailand have been consistent as usual. Interestingly,  there has not been a significant disruption in importing rice from India, however, there exists a possibility of prices going up given the 20 percent levy on exports. Singapore’s Ministry of Trade and Industry* reported that India placed restrictions on rice exports of key varieties of rice like unmilled, husk brown, and broken rice, all of which have negligible demand in Singapore. 

In addition, Singapore’s Rice Stockpile Scheme has helped the city-state alleviate any substantial impacts of supply disruptions or fluctuations in price. Under the Scheme, rice importers in the country are required to hold a buffer reserve equivalent to two times their average monthly imports. Singapore’s Ministry of Trade oversees the implementation of the Rice Stockpile Scheme and for the time being the government of Singapore will continue to monitor the situation and ensure that the city-state has a sufficient supply of rice.

The Wheat Scenario

Wheat flour from India, albeit making up only a small proportion of total imports, is sought after by Indian eateries here as it produces soft and chewy chapati, an Indian staple. India, the world’s second-biggest producer of wheat, stopped exporting the grain and its flour in May in an attempt to put a cap on skyrocketing domestic prices after a heatwave parched crops and affected wheat supply.

The ban came amid Ukraine’s wheat exports being curtailed by the ongoing Russia-Ukraine war. Ukraine used to be the fourth-biggest supplier of wheat to the world, accounting for about 9 percent of the global wheat trade. Some eateries have suspended menu items like chapati, poori bhaji, and tandoori as all of them require wheat flour to make.

Major food chains in the city-state are sourcing wheat flour from various countries like Sri Lanka, Australia, Canada, and the United States, according to a report by The Straits Times. “The (wheat) flour shortage will affect our business very badly. We cannot pass all the costs to our customers, we have to try and keep prices low,” said Mathavan Adi Balakrishnan, managing director of Sakunthala’s, one of the leading eateries in the Little India precinct in Singapore. 

Conclusion

Owing to India’s stance to prioritize domestic needs and stabilize rice prices in the domestic market, the government of India on the 10th of September placed restrictions on all varieties of non-basmati rice except parboiled rice along with a 20 percent duty. With respect to wheat, India is a marginal player in the global wheat trade and contributes to around 6 percent of Singapore’s total Wheat Imports India’s move may affect its large base of grain buyers around the world.  Singapore, one of the leading buyers did take the policy changes comparatively well as compared to the other countries.

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