As wheat prices soar, India looks for export markets – The Hindu BusinessLine

Clipped from: https://www.thehindubusinessline.com/todays-paper/as-wheat-prices-soar-india-looks-for-export-markets/article65191674.ece

With huge surplus, can turn Asia’s ‘food bowl’; APEDA in touch with countries, Indian missions abroad

India is reaching out to exporters and countries looking for wheat supplies with the prices of the cereal soaring to a record high of $13.50 a bushel (nearly $500 a tonne) on Friday. Wheat prices have increased about 60 per cent in the past week as the Russian-Ukraine conflict brought exports from the Black Sea to a halt.

Trade analysts see India emerging as the “food bowl” of Asia at least, besides meeting the immediate needs of other countries, particularly North Africa. In Asia, only India has exportable stocks.

Agricultural and Processed Food Products Export Development Authority (APEDA) Chairman M Angamuthu told BusinessLine that the authority is in touch with various countries.

Exports to hit new high

“Export of wheat will reach new heights in the days to come. We are in touch with Indian missions abroad,” he said. The APEDA chairman said India was targeting South Asia, West Asia, ASEAN nations and North Africa for shipments.

India is looking to emerge as the alternative source for Russian and Ukraine wheat, which together make up nearly 30 per cent of the global supplies. Last season (August 2020-July 2021), Russia exported 39.10 million tonnes (mt) and Ukraine 16.85 mt of the total global shipments of 198.75 mt.

Cheaper Indian wheat

With Indian wheat selling at $10-15/tonne discount to Russian and Ukraine supplies, exporters are confident of making up for the shipment shortage from the warring nations.

A trader with a multinational firm said exporters have signed about 1 mt of wheat for exports over the next two months. “We are getting enquiries from even countries such as Thailand for food and feed,” said M Madan Prakash, President, Agri Commodities Exporters Association.

Shippers are quoting wheat between $340 and $360 a tonne free-on-board, compared with over $400 a tonne from Europe, Argentina and the US. Prices are up from $300 a week ago.

India has about 26 mt of stocks with the Food Corporation of India against the mandatory buffer norm of 4.4 mt operational stock and three mt of strategic reserve. In addition, India will likely harvest a record 111.32 mt of wheat this year, giving the country that much more elbow room.

Rice & corn too in demand

It is also looking to supply other agricultural commodities such as corn (maize) and rice, which are also seeing heightened demand in view of the spike in wheat prices.

Apart from all these, traders say India enjoys logistics advantage as it is closer to some of these buyers. Also, shipments from India can be done in smaller lots when prices are skyrocketing compared with 50,000-plus-tonne shipments buyers have to make while purchasing from other origins.

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