Wheat exports gets fresh push as war unsettles global supply

Even though India's wheat exports were robust in FY22, riding on a possible supply disruption of foodgrains -- especially wheat -- as the tensions between Russia and Ukraine turned into a full-blown war, export demand has got a fresh push.

The stumbling block, though, is the traditional opposition from western nations within the World Trade Organisation (WTO) to wheat exports from India because they consider the Minimum Support Price for food grains guaranteed by the government a subsidy that goes against the principles upheld by the WTO.

Both the countries involved in the ongoing war are major producers of wheat. India produces surplus foodgrains and the fresh export demand won't put inflationary pressure on their prices in the country.

To put matters in perspective, India's wheat exports during AprilDecember 2021 were pegged at 5.04 mn tonnes, against 1.06 mn tonnes during the same period in 2020, and the offtake is expected to rise further in the fourth quarter, riding on record food grain production.

On February 16, 2022, the Agriculture Ministry announced that

India was poised to produce 111.32 million tonnes of wheat, which is a record in itself. The overall estimate for foodgrains is 316.06 million tonnes, again a record.

In 2021, wheat production stood at 109.24 million tonnes, while overall food grains production was estimated at 303.34 million tonnes.

India is the second largest producer of wheat with a share of around 13.53 per cent of world's total production, but the major chunk of the production goes towards domestic consumption.

India, incidentally, has been the world's top rice exporter. Wheat exports have also seen a 48.56 per cent compounded annual growth rate (CAGR) between 2016 and 2020, touching US$243 million in 2020, against US$50 million in 2016, according to data in the ITC Trade Map 2021.