A lower wheat yield amid a severe summer made prices go high in the local market of India. Steps had to be taken to regulate the market and in May, the government decided to ban the export of wheat to ensure food security. There were reports asserting that India is about to import wheat due to a shortage of stocks in the domestic market and this took many by surprise as India has been pretty much self-reliant in terms of wheat. However, the government denied such claims and assured us that there are enough stocks of the essential commodity for public distribution.
India Going Through A Wheat Crisis
Wheat production saw a huge decline in India due to unusual summers with record heat waves largely affecting farmers and traders. Adding to that, Indian authorities have predicted this financial year’s yield to be at 105 million tons, 6 million tonnes lower from the earlier expected estimate of 111 million. Out of the 105 million tonnes, around 30 million tonnes are to be utilized in public distribution schemes to ensure food security like NFSA (National Food Security Act), PM-JAY (Pradhan Mantri Jan Arogya Yojana), and OWS (Other Welfare Schemes). Last year, around 42 million tonnes of wheat were distributed under NFSA and PM-JAY. It is to be noted that the local flour mills and traders forecast the yield to stand around 98 million tons to 102 million tons.
Concerns over wheat production and shortages are worsening as according to a report citing official data, India’s wheat reserves have fallen to a 14-year low this month. Moreover, consumer prices have seen an increase of 11.7 percent in July while wholesale prices saw an increase of 13.6 percent. Some experts say that wheat prices are expected to see an increase of 40 percent by the end of the year. Owing to these, the ban on wheat export is likely to stay. Despite being the second largest producer of Wheat Export From India exported only a small portion of its wheat production. However, India does export wheat flour and is still exporting. For the financial year 2022, India is exporting nearly 100,000 tonnes of wheat flour every month despite the wheat export ban.
Current global market scenario is hit by multiple factors. Ranging from high production costs, numerous logistical challenges, and situations of conflict between a number of nations. All these are acting as trade barriers directly and are affecting the supply chains around the world. Moreover, the Russia-Ukraine crisis created problems not just for these two countries but also for different countries in the world. Prior to the Russia-Ukraine war, the African continent was dependent on food supplies from Ukraine. The disruption in the deliveries have made it hard for them to cope up. As it seems, Russia and Ukraine have come to an agreement for allowing trade, and s the plight of the global market is expected to improve. A number of shipments have been carried out by Ukraine through the Black Sea Corridor while JCC (Joint Coordination Committee) oversees the operation.