India’s Wheat Exports Could Surge As A Consequence Of The Russia-Ukraine War 

India's Wheat Exports Could Surge As A Consequence Of The Russia-Ukraine War
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India could become a significant global exporter of wheat because Russia invaded Ukraine.

The two warring countries striding the Black Sea have been the key providers of the commodity, accounting for approximately 30% of global exports. However, since the beginning of the full-fledged war on February 24, economic activity in Ukrainian ports has ceased, and Russia’s wheat shipments have come to a halt.

Considering the current uncertain geopolitical environment, the global demand for wheat could migrate to India, according to Nitin Gupta, vice-president of Olam Agro India. 

India is set to notching up a record export of wheat of 7 million tonnes for the current year. 

Despite being the second-largest producer of wheat globally, it accounts for less than 1% of global exports of the commodity. The majority of the wheat produced in the country is traditionally consumed domestically. 

India has built excess wheat stocks to fill the hole left by Russia and Ukraine after a few years of bumper crops thanks to high-yielding seed types, effective agricultural mechanization, and favourable meteorological conditions. Its granaries are currently overflowing with more than 100 million tonnes of the staple.

Wheat prices have risen to a 14-year high, topping $11 per bushel, making exports profitable.

For example, exporters were ready to pay up to Rs2,450 ($31.84) per quintal at the Kandla port in the Western Indian state of Gujarat, compared to Rs2,000 ($26) per quintal a week before.

“Also, wheat availability in the world market anyway remains limited until April-May, and India can easily tap this opportunity,” Gupta said. 

Also Read: Switzerland Imposed Sanctions in Russia Still Oil, Metal and Grains Trade There

India’s crop will start hitting the markets by March 15.

The Philippines, Bangladesh, South Korea, Sri Lanka, and the United Arab Emirates are among the top purchasers of Indian wheat. Others, such as Lebanon, are looking to India.

“Escalation in tension means this is now an issue about food security, and countries will look out for wheat imports,” said Biswajit Dhar, an economics professor at JNU, told daily the Mint.

“The way the situation is panning out, the net food-importing countries will be pushed to the wall. For them importing from wherever it is available will be a priority. India is a large wheat exporter and hence will find itself at an advantageous position.”

For India, however, possessing sufficient stocks of wheat is not enough. According to Madan Sabnavis, chief economist of the Bank of Baroda, India needs a long-term policy to help the country quickly export wheat to international buyers.

For example, in some areas of the nation, traders and commission agents are clamouring for tax breaks to take advantage of the chance.

In Punjab, for example, food retail giants and foodgrain exporters such as ITC, Cargill, Adani Group, and the Australian Wheat Board have made inquiries. High taxes—3% each for the market fee and the rural development fund, 2.5% commission to agents, and 1% service charges—could stifle demand.

Also Read: Is It Possible That The Invasion Of Ukraine Will Cause A Global Financial Meltdown?

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