world" PM Narendra Modi said on Tuesday, April 12, 2022.
We should trust the said words of PM Modi. It really matters a lot when
Modi is saying these words and the world is going through a food crisis. On the
other hand, the food crisis in the eastern part of Europe and Africa is getting
worse day by day. Ukraine's major food supply chain was severely stuck after
Russia's invasion of Ukraine. The impact of the war is huge on wheat and edible
oils, although many other commodities are prominent, but wheat is one of the
major commodities that has caused demand collapse across the world.
Ukraine and Russia together contribute
30% of the world's wheat production.
Therefore, the huge share in the supply chain is now clearly visible
everywhere. At the same time, India being the largest producer of wheat has the
potential to feed the world but there are other internal issues where the
greater responsibility is the issue of India's food security. However, our PM
shared his views with the world that India has the capacity and capability to
feed through our natural agricultural produce and in other words can supply
them to feed on a large scale.
At the same time, it was decided by the Government of India to export wheat
and ensure that the gap in the supply chain of wheat caused by the
Russian/Ukraine War was quickly filled and to take the opportunity to dominate
the international market.
This has given us an opportunity to
show our strength to the developed countries.
Undoubtedly more than 7.85 million
tonnes were exported during the financial year 2021-22, and ~1.1 million tonnes
were exported in April, 2022.
It was stated that India could export 10 million tonnes of wheat by the end
of July 2022. Things were going well, the Kandla port became congested due to
heavy traffic of ships and thousands of trucks outside the port. Kandla has a
strategic advantage due to its proximity to the western port and wheat
producing states.
The direct export of wheat has given a big support to the prices, farmers
are getting better rates above the MSP. Things were in a straight line either
way. Once the Indian government opened up the export of wheat, paving the way
for the world where things were coming from India in the best possible way.
Private companies started signing and selling to foreign buyers. You may be
aware that due to the decision of the Government of India and the priority
loading at the load port, exporters of other commodities such as wheat flour,
rice and other commodities have to wait for a month for the birth of their
vessel. In such a situation, they are facing heavy losses, why only because of
wheat and that GOI made on their priority list.
On can compare the prices with MSP. Base selling ex-warehouse rates were
around Rs.2250/Qntl during April, 2022, which was F.O.R. Kandla Rs.2550~ per
quintal.
More than profit to individual
exporters it was a pride that we are exporting Wheat. India is exporting wheat
where we are going to fulfil the hope of countries where food crises is on the
edge. On the other hand, this will give supports to the ambitious words
of PM Modi which he given to world that India is going to feed the world.
But, in between something happened unexpectedly,
On May 13,
2022 the government banned all private wheat exports with immediate effect. It
was not expected that GOI will take this action without
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consulting with the trade bodies.
My concern is why Govt. of India took this kind of decision. Is there no
worth or importance of Indian exporters who brought tons of value of wheat at
Port for loading to their buyers as per the policies of DGFT.
Is this a decision that only hurt exporters, transporters and shipping
agents? Is not this hampering image of our country?
Still 1.2 million-ton wheat of 2700~ crores is lying at various port areas
as on date or some are saying 2 million ton stocks, however exact figures are
not available on public portals or even APEDA has nothing to share. Amazing
things. At this age of technology, we don't have the exact stocks which are
moved for export and lying at port areas. Unexpected things are making the
noise and hampering our image.
I have few ethical questions asking to Concern Ministry of GOI:
- Why Wheat
export is allowed without evaluating the internal facts? - What will
happen to nice words of PM Modi which he delivers to world that India will
feed the world? - Without
consulting or going through the facts why Ban is imposed on Wheat export? - Who
cares about India’s image in WTO?
I understand that first of all we should think about ourselves, our
country, but also we should think about our business houses/our exporters and
the people in this ecosystem who have done this through the circular of the
Director General of Foreign Trade. Money was spent on one word. , For those
people, the wheat export circular was not from DGFT, it was from PM Modi "when
he said that India is going to feed the world"
I request the concerned Ministry to look into the matter and before taking
any further steps, request for exemption to those exporters whose stock is
lying in port warehouses and are ready to ship. Most of the contracts are done
on CAD basis, so they will not be able to produce LC at this time. However,
such hasty decisions by the Government of India will certainly bring disrepute
to our country, our business practice and trust.
Written as a commodity analysist and trader by me,
