Wheat exports may exceed 5.5 mt

Last Updated: Sat, Nov 10, 2012 18:40 hrs

Wheat exports are likely to exceed 5.5 million tonnes (mt) this financial year. This would make India the seventh-largest exporter of the commodity. In 2011-12, it was the sixteenth-largest wheat exporter.

In the first half of the current financial year, wheat exports stood at 2.43 mt, with average realisation of $270 a tonne, or about Rs 14 a kg, according to a senior official at Agricultural & Processed Food Products Export Development Authority (APEDA).

In September 2011, the government lifted a ban on wheat exports, after it was convinced the stocks were enough to meet requirements under the proposed Food Security Bill. Wheat exports till March this year stood at 0.85 mt, primarily owing to exports to Bangladesh, Myanmar, Iran, South Korea, Thailand, Nepal, etc. As on October 1, wheat stocks with state-run agencies stood at 43.15 mt.

Global wheat exporters (million tonnes)



United States 28.6 31.3
Canada 17.4 19.0
Australia 25.0 18.0
EU-27 16.4 16.5
Russia 21.6 9.0
Kazakhstan 11.4 7.0
India 0.8 5.5
Argentina 12.7 5.5
Ukraine 5.4 4.0
Turkey 3.7 3.5
Brazil 2.0 1.5
Paraguay 0.9 1.2
Uruguay 1.5 1.0
China 0.9 1.0
Pakistan 1.1 0.8
UAE 1.1 0.6

The US Department of Agriculture (USDA) has estimated global wheat production this financial year to decline about five per cent to 665.33 mt, compared with 694.69 mt in 2011-12, owing to poor weather. Lower production globally has increased the demand for wheat. Therefore, despite the poor quality of wheat produced in India, wheat exports from the country are estimated to rise.

Traditional wheat export destinations like Bangladesh, Myanmar, Indonesia and Nepal are, however, finding it difficult to purchase the commodity from India. Frequent changes in government policies are proving to be hurdle to the sustained purchase of wheat from India, said the APEDA official.

Meanwhile, Malaysia has sought regular supply of wheat from India. Recently, India agreed to export 6,40,000 tonnes of wheat to countries such as South Korea, Indonesia, Bangladesh and Thailand.

Traders believe the demand for Indian wheat would rise after Ukraine ban exports later this month. A couple of weeks earlier, the government had floated two tenders for wheat exports, at about $310 a tonne. US soft wheat is quoted at about $380 a tonne in Asian markets, while Australian prime wheat is quoted at $385 a tonne. Prasoon Mathur of Religare Commodities said the low prices for Indian wheat resulted from the unmatched quality of the commodity from competing countries.

USDA estimates India's wheat output this financial year at 91 mt, compared with 86.87 mt in 2011-12. Falling prices due to frequent additional releases by the government is set to increase consumption to 85.45 mt this financial year, compared with 81.56 mt in 2011-12.

Leading multinational companies engaged in importing wheat from India include Glencore Intern-ational, Australian Wheat Board, Adani, Bunge, Cargill and Louis Dreyfus. A senior official from a multinational company said wheat exports were set to rise in the second half of 2012-13, adding these would surpass the estimated 5.5 mt. For better realisation, exporters should focus on quality and the quarantine issue, the official added.

The festive season has seen a gradual improvement in wheat prices in the spot and futures markets. Typically, market demand is firm during this period and wheat products such as maida and suji also see good demand. Along with domestic demand, export enquiries have also increased. This may raise sugar prices to about Rs 16 a kg by December, compared with the current Rs 15 a kg, said Mathur.

India is in talks with Iran for exporting about 2,00,000 tonnes. Discussions on the issue were earlier stuck due to quality issues. However, with the issue being resolved, exports to Iran would resume soon, said Haresh Maru, a Vashi-based wheat exporter.

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