India rejects report, says no plan to import wheat

“Given a lot of the war risk premium has come off from global wheat prices, India can look at augmenting its domestic wheat supply via more imports,” Sonal Varma, an economist at Nomura Holdings Inc, was quoted by Bloomberg as saying. “However, since domestic wholesale wheat prices are lower than global prices, a reduction in import duties will also be essential to make it a viable option.”

Despite being the world’s second-biggest wheat grower, India has never been a major exporter. It also never imported much, with overseas purchases at about 0.02% of production annually. The country was pretty much self-sufficient.

Earlier this year, multiple rounds of heat waves in several wheat-growing regions in India ahead of the rabi harvest affected some wheat crops.

As per the fourth advance estimate of production of major agricultural crops released by the Federal Ministry of Agriculture and Farmers Welfare, production of wheat during 2021-22 is estimated at 106.84 million tonnes, as against the reported earlier estimate of 111 million tonnes.

As the tensions between Russia and Ukraine turned into a full-blown war, export demand for wheat got a boost, resulting in lifetime high prices of the staple foodgrain in the local mandis. Heat wave-led crop loss too led to price rises. Notably, both the countries involved in the conflict — Ukraine and Russia — are two major suppliers of wheat.

In Indore in Madhya Pradesh, which is considered one of the key markets, wheat prices touched as high as Rs2,400-2,500 per 100kg, against Rs2,000-2,100 until the conflict in Ukraine broke out. Prices of wheat usually remain on the lower side during this time of the year as freshly harvested rabi crops make their way into the physical markets or mandis.

However, wholesale prices of wheat in the domestic mandis have lately managed to fall from their lifetime highs and have stabilized as the central government timely brought in a slew of policy interventions on the exports of the foodgrain.

For the record, to manage the overall food security of the country as well as meet the needs of the neighbouring and other vulnerable countries, India amended the export policy of wheat by putting its export under the “prohibited” category.

The government while banning exports of wheat had stated that the move was made with the purpose to manage the overall food security of the country as well as meeting the needs of the neighbouring and other vulnerable countries.

The Indian government did not stop at just restricting exports of wheat.

During the recent Parliament session, the government said that there was no shortage of wheat stock in the central pool.