The Russia-Ukraine situation may provide an opportunity for India to export more wheat on global markets, and domestic exporters should take advantage of this opportunity.
India's central pool was 24.2 million tonnes, which was twice as large as the buffer and strategic requirements.
Russia and Ukraine account for more than a quarter of global wheat exports.
Russia is the world's largest wheat exporter, accounting for more than 18% of global exports.
Russia and Ukraine exported more than a quarter of the world's wheat (25.4%) in 2019.
According to the report, Egypt, Turkey, and Bangladesh purchased more than half of Russia's wheat.
Egypt is the world's largest importer of wheat. It spends more than USD 4 billion every year to feed its population of over 100 million people. Russia and Ukraine meet more than 70% of Egypt's imported wheat demand.
Turkey also spends a lot of money on wheat from Russia and Ukraine, with 74% of its imports worth USD 1.6 billion coming from those two nations in 2019.
The Ukraine issue may create an opportunity for India to export more wheat, assuming we ship out more, as our central pool stood at 24.2 million tonnes, twice the buffer and strategic needs," the sources noted.
Animal and vegetable fats and oils are India's most important Ukrainian import.
"However, the current scenario will not have a negative influence on India's trade position because this commodity accounts for barely 10% of India's overall imports of this item from around the world," one insider stated.
Russia (USD 7.9 billion), the United States (USD 6.32 billion), Canada (USD 6.3 billion), France (USD 4.5 billion), and Ukraine (3.6 billion) are the top five countries that shipped the most wheat in terms of dollar value.
In contrast to sectors such as energy and automotive, which have been hit the hardest by supply chain delays as a result of the Ukraine conflict, India's agriculture sector saw this as an "opportunity" and increased wheat exports to a record high.
A top government official said on Saturday that India, the world's second-largest producer of wheat, had already exported a record 6.6 million tonnes of the grain this fiscal year, despite rising worldwide prices.
Russia and Ukraine account for over a quarter of the world's wheat supply.
This year's wheat crop will be ready in August and September. As a result, global wheat prices have already risen and are now ruling in the range of Rs 24,000-25,000 per tonne," Food Secretary Sudhanshu Pandey said, adding that it is an "opportunity" for Indian exporters because new wheat crops will be available earlier than other global wheat producers beginning March 15th.
As a result, Indian wheat exports have increased. "By the end of February, we had shipped 6.6 million tonnes of wheat," Pandey said in a virtual press conference.
According to the Agriculture Ministry's second advance estimate, India's wheat production will reach a new high of 111.32 million tonnes in the 2021-22 crop year (July-June), up from 109.59 million tonnes the previous year.
Wheat, the primary rabi (winter) crop, will be available on the market beginning March 15. In addition, the country has an excess of wheat in government godowns.
"Our position is very comfortable" in the case of culinary oils, for which India is primarily reliant on imports, and for sunflower oil, which is reliant on crisis-hit Ukraine, according to Pandey.
Meanwhile, the Russia-Ukraine conflict has already begun to cause disruptions in numerous Indian industries, including oil and gas, automobiles, and defense, in addition to the already apparent marks on financial markets, crude oil, and supply chain.
Russia Announced Wheat Export Restrictions:
Russia imposed new limits on wheat exports, although its wheat sales had fallen in the current marketing year. The country's recent step may further crimp the already-scarce global wheat supply.
Russia, the world's largest wheat exporter, has announced an 8 million-tonne wheat export quota for the period February 15 to June 30. The quota is in addition to Russia's floating-rate wheat export tax, which was adopted last June and has reduced year-over-year grain shipments by almost 30% since the start of the marketing year in July.
The export quota, designed to reduce domestic food price inflation in Russia, may force wheat importers to seek supply from other big producers, such as the United States and Australia. However, with global ending wheat stocks at their lowest in 14 years, a shift in international trade flows might continue to exert upward pressure on wheat prices, rising input costs for a wide range of food industries, from bakeries to breakfast cereal manufacturers.
FOB export prices for milling wheat from the Black Sea region, which includes Russia and Ukraine, have increased by 38% since July 1. Russia's wheat export tax compounds FOB price increases, which helps to explain the country's steep decline in wheat exports. In comparison, FOB export prices for hard red winter wheat supplied from US Gulf ports have increased by 30%.
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