Located in Asia, India is the 2nd largest wheat producer as well as consumer in the world. Owing to high domestic demand and rising domestic prices, the 2nd highest producer of the commodity restricted wheat exports in 2022.
Located in South Asia, India is the 2nd largest wheat producer and consumer in the world, ranking behind China.
India’s Wheat Export Restrictions
The Government of India (GOI) banned the exports of wheat in May ’22 and further restricted wheat flour shipments from July 22. However, the government still permitted a few shipments in order to meet the food security requirements of countries around the world.
With the subsiding impact of covid-19 and the mass rollout of vaccines, people had high hopes for the year 2022. However, the year took no time to spoil the high expectations that people had from the year.
With the diminishing impact of Covid-19, people had high hopes for the year 2022. However, that went for a toss in a manner that no one was ready for. While Covid-19 threw life out of gear in the past two years, the series of events in 2022, smashed the high expectations that people in general and exporters and importers of food and agro-commodities had in particular.
Ukraine and Russia are significant exporters of grain in the global markets and they together accounted for nearly 30% of the total wheat trade exports annually prior to the conflict between them. Ukraine is a major sunflower oil and corn exporter while Russia is a significant supplier of fertilizer. The two countries came to an agreement that teams would check vessels going out of Ukraine’s port to ensure that no barred people or goods were arriving or departing from the ports.
Turkey has always held a strategic position in global trade from the time of traders traveling via the silk route to now helping Russia and Ukraine conduct their yearly trade during the conflict between the two countries with the help of the Black Sea Grain Initiative.
India is the second largest wheat producer in the world and the country last year commanded a 14.14% share in the total wheat production. Uttar Pradesh, Punjab, Haryana, Madhya Pradesh, Rajasthan, Bihar, and Gujarat are the major wheat-producing states of India as they receive ample rainfall every year needed for Wheat Production. The two most important wheat-growing zones in the country are the Ganga-Satluj plains in the northwest and the black soil region of the Deccan which have well-drained fertile loamy and clayey loamy soils.
According to the statistics released by the Food Ministry of India, the stocks of wheat are 11 per cent higher than the buffered standard set by the government. The surplus stood at 22.74 million tonnes at the beginning of this month. However, the state agency- Food Corporation of India (FCI) depicted a five-year dip in wheat supply due to a 57 per cent drop in procurements of wheat. This has been a result of a decrease in production and the forceful purchasing by Wheat Exporters for export purposes.
Egyptian agricultural exports from 1stJanuary’22 to 26thOctober’22 amounted to 5,285,820 tons which accounted for an increase of 335,639 tons over the same period in the previous year (4,950,181 tons in the previous year same period).**
The rising prices in agro-commodities supplies in the export market directly led to chilling demand from overseas buyers. This resulted in the fall of U.S wheat futures.
The United States is one of the biggest producers of wheat in the world. Therefore, any fluctuations in the supply chain directly affect the global market and the domestic futures trades. According to the U.S. Department of Agriculture’s (USDA) weekly Export Sales Report, total known outstanding sales and accumulated exports of all classes of wheat for the 2022-23 marketing year, through October 13, 2022, was 11.2 million metric tonnes (MMT), 8 percent lower than last year’s 12.3 million metric tonnes.