The Centre has set a target to export at least a million tonnes (mt) of wheat every month next fiscal as it wants the country to emerge as a reliable source of the grain’s shipments both in “quantity and quality”. It wants to tap the current opportunities provided by the Russia-Ukraine conflict to the optimum.
This sets a target of 12 mt for wheat exports next fiscal. This fiscal, the foodgrain’s exports are likely to be at a record of over 7.5 mt. The US Department of Agriculture has projected the country’s wheat exports this fiscal at 10 mt.
A meeting of exporters and officials of various ministries such as Railways, Shipping, Commerce and Agriculture was chaired by Madhya Pradesh Chief Minister Shivraj Singh Chouhan on Thursday to remove all impediments in speeding up the shipments. A task force has also been formed for this purpose.
At the same time, the Centre is now prepared to prune its wheat procurement target under the minimum support price (MSP) scheme by 10 mt. For the rabi marketing season starting April 1, the Food Ministry had set a procurement target of 44 mt.
The meeting was held on the heels of India expanding its wheat export basket with Sudan and Thailand joining the list of importers buying Indian wheat. Russia and Ukraine make up nearly 30 per cent of the wheat export market. The conflict in eastern Europe between these two nations has resulted in shipments of commodities such as wheat, corn, sunflower oil and barley coming to a halt.
Removal of mandi tax
At the meeting, Chouhan assured to remove mandi tax in the States as it would make Indian wheat more competitive, the sources said. Since MP takes the lead in growing the best quality Sharbati wheat variety, Chouhan wants to encash it politically as the State is due to go in for assembly poll next year, sources said.
Social media is flooded with messages highlighting his efforts on wheat export. He has also called a separate meeting with exporters on March 29 at Bhopal.
All commodities (except deregulated fruits and vegetables) in Madhya Pradesh are charged at 1 per cent mandi tax in addition to 0.2 per cent ‘Nirashit Cess’, both inside or outside mandis.
Maintaining standards
Speaking at the event, which was organised by Food Ministry and also joined by many Indian ambassadors virtually, Food and Commerce Minister Piyush Goyal stressed on quality and asked exporters to strictly follow the best standards so that Indian product leaves a mark in global trade. He said the Agricultural and Processed Food Products Export Development Authority (APEDA) would head a task force to coordinate with all agencies and a helpline will be operational for the exporters, sources said.
Lauding the efforts of the government, an exporter, who was present at the event that lasted for over an hour, said: “If in the first three-four months at least 5 mt exports are completed, the target will be achieved as this is the most crucial period with the entire harvest reaching the market during April-May. The government has to find space at ports, make available rakes and these are all challenging issues in view of priorities accorded to fertiliser and foodgrains (of FCI).”
Goyal is also learnt to have asked APEDA to take trade delegations to countries where there are potential so that exporters get an opportunity to meet buyers there, sources said. APEDA is likely to organise such a trip in April-May, sources said. The government will also soon prepare short-term strategies to meet the objective.
On the procurement front, officials of the Food Ministry have informed that the government may miss the target of 44 mt in 2022-23 and there will not be any problem if it touches 35 mt. The FCI had 23.4 mt of stock as on March 1, whereas the annual normal offtake on account of distribution through ration shops is 21-22 mt (excluding PMGKAY, OMSS and other welfare schemes).
However, traders said if the current price trend continues it will be difficult for the government to procure even 30 mt. The weighted average mandi price in Madhya Pradesh was ₹2,149/quintal so far this month, whereas it was ₹2,312 in Gujarat, ₹2,381 in Maharashtra and ₹2,117 in Rajasthan against the minimum support prices of ₹2,015/quintal.
Since the Russian-Ukraine conflict intensified on February 24, about a million tonne of wheat export deals have been signed. The Commerce Ministry, looking to tap the current opportunity, wants to export wheat to the top 10 global importers, including Egypt and China, and thus expand its shipments base.
Indian wheat is being offered at $335-350 a tonne free-on-board (f.o.b) for exports now. Wheat flour is also being shipped with deals signed at $380-390 a tonne f.o.b.
On the Chicago Board of Trade, benchmark wheat futures are quoted at $10.89 a bushel. Wheat prices have surged 50 per cent since the beginning of this year, with the bulk of the hike after February 24. This has turned the focus on Indian wheat, which is traded at a discount to other origin wheat.
During the April-January period of the current fiscal, wheat exports had soared to 60.2 lt, valued at $1.7 billion, compared with 13.78 lt, valued at $358 million, a year ago.
Besides high stocks, another record wheat production of 111.32 million tonnes this season to June against 109.59 million tonnes last season is also expected to help., including in carrying overflowing granaries at huge costs.