India commands a mammoth 40% share of the global rice trade and the Asian nation is the 2nd largest producer and consumer of wheat in the world. As per government officials, the wheat and broken rice export restrictions are likely to continue and the free food grain scheme would get an additional annual subsidy of around Rs 14,000 crore, which would be less than 0.1 percent of the GDP.
India’s Wheat And Broken Rice Export Restrictions
The Government of India (GOI) in May 2022 banned the exports of wheat and further restricted shipments of wheat flour from the month of July. However, the government still permitted a few shipments in order to meet the food security requirements of countries around the world.
India exports broken rice to more than 76 countries with China being the largest buyer of broken rice and purchasing the commodity for animal feed and African countries requiring it for human consumption. The export policy on broken rice was revised and the commodity was moved from the ‘free’ to the ‘prohibited’ category on 8thSeptember’22 which was ordered by the Directorate General of Foreign Trade, Union Ministry of Commerce, India. The policy change came into effect on 9thSeptember’22, though some exports could go through till 15thSeptember’22 (Later changed to 30thSeptember’22).
Current Scenario
While the data on agricultural production is still yet to come, the government official stated that they are witnessing an increase in wheat prices and that grains are needed for domestic supply. He added that the Government has no plan of lifting or relaxing the ban on wheat and broken rice exports and that the ban might continue in the current year if the stock holdings do not improve. As sugar prices remain stable, the Government currently does not plan to change its minimum selling price.
During the previous week, Santosh Kumar Sarangi, the Director General of Foreign Trade said that the Government would take the appropriate decision pertaining to the demand on lifting the ban on wheat exports during the harvest around March-April. “At the time when it will be felt that there is an equilibrium in the demand and supply of wheat, arrangements will be made to allow the export of this food grain.” As per him, a review would be conducted on the gap between the demand and supply of wheat in the country.
Changes In The Government’s Food And Distribution Scheme In the previous month, the Union Cabinet decided to bring a stop to the PM Kisan Anna Yojna (PMGKAY) after a period of 28 months since its commencement. From 1st January’23, the Centre has allowed for free rations for an entire year under the National Food Security Act (NFSA). According to government estimates, the total cost of food subsidies for the nation’s 81.35 crore poor people will now cost the state exchequer Rs 2 lakh crore.
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