Indian government may allow fresh wheat exports to at least five countries, including Indonesia, in the next few weeks, senior government official sources told S&P Global Commodity Insights.
“Following India’s decision to restrict exports the government has received requests from several countries. The authorities are assessing domestic wheat requirement and availability of wheat,” one official with food ministry said.
According to officials, India received requests for wheat supplies from Bangladesh, United Arab Emirates, Indonesia, Yemen, and Oman.
Indonesia is one of the largest wheat importers in the world, while Bangladesh and UAE usually purchase significant volumes of wheat from India.
The officials added that this will be the third time India may allow exports since it imposed a ban on wheat exports on May 13.
After the ban was imposed, India allowed exports of around 750,000 mt of wheat in two tranches over the past one month.
Fresh supplies from India, however, may weigh on Australian wheat export prices.
Since India’s wheat exports dwindled, Australian wheat has become a major source of wheat in the Asia Pacific region and exports prices of Australian Premium White and Australian Standard White varieties of wheat rose.
Platts assessed APW wheat prices at $/mt June 13, up 3% on month, while ASW wheat was assessed at $/mt, up over 2% on month, according to S&P Global data.
Output projections slide, export potential limited
India had emerged as a key supplier of wheat in the aftermath of Russia’s invasion of Ukraine. However, it imposed a ban on exports following sharp price rise in domestic wholesale prices after a severe heat wave reduced India’s wheat yield. The heat wave also reduced India’s wheat output projection for marketing year 2022-23 (April-March) to 106.4 million mt from a record 111.4 million mt seen in February. The output is seen nearly 3% lower year on year.
While banning the exports, the government had allowed exemptions to shipments that had letters of credit issued before May 13 or through government interventions to ensure food security in other countries.
The sudden decision to stop exports has dampened export potential of India, a Bangalore-based trader said.
Since the May 13 ban, India’s exports fell to 1.13 million mt in May, down 23% on the month, against a record 1.46 million mt in April, an official with the food ministry said.
India had been expecting to export around 11 million mt-12 million mt wheat in MY 2022-23.
However, the sudden decision to restrict exports is likely to limit India’s export potential to around 7.4 million-7.5 million mt in MY 2022-23. In MY 2021-22, India exported a record 7.9 million mt wheat.
“We expect the government to allow exports around 7.5 million mt wheat exports under the exemptions provided,” a Mumbai-based trader said.
However, some in the Indian trade circles had concerns about future Indian shipments, after Turkey rejected a consignment of 56,877 mt of Indian durum wheat on phytosanitary concerns.
