Nayan Dave and Banikinkar Patnaik
On Tuesday, the government partially relaxed previous orders and allowed shipments of wheat that were either handed over to customs authorities for testing or registered in their systems by May 13, when a surprise ban on grain exports was announced.
According to Dinesh Gupta, president of the Kandla Custom Brokers Association (KCBA), the move is expected to facilitate the release of about 0.35 million tonnes (mt) of wheat from Kandla port. It is still only a fraction of the estimated 2-2.2 metric tons of grain currently in various ports or transit.
About 6,000 trucks loaded with wheat parked in the Kandla-Gandhidham area of Gujarat are stuck without permission from the authorities to load on the ship, said Sanjay Dav, a customs broker. “A train wreck is also stuck and waiting to be unloaded near Gandhidham,” he added. The problem is that some trucks carrying wheat are still arriving at the port, said KCBA vice-president Surjit Chakraborty.
Of course, since supplies supported by the letter of credit, usually a payment guarantee, issued before May 13, are permitted according to prior notice (excluding government-to-government transactions), an additional 0.35-0.4 mt may be sent. Out, KCBA’s Gupta added.
About 2 metric tons of wheat has been sent in this financial year even before the ban was announced.
According to an official statement, at the request of Cairo, the Department of Foreign Trade decided to allow the shipment of 61,500 tons of wheat to Egypt (of which 17,160 tons have not yet been loaded at Kandla port). Supplier, Mera International India has also submitted a representation.
Surprisingly, just weeks after Russia and Ukraine planned to send at least 10 metric tons to partially fill the void created by the conflict, India banned wheat exports on May 13, bringing the total to 53 metric tons. And Meslin (a mixture of wheat and rye) in 2021.
The move was prompted by the catastrophe expected from the Ministry of Agriculture’s February forecast of 111.3 million tonnes of wheat harvest, mainly due to intense heat waves from late March. Some analysts now expect output to drop to around 90-95 million tonnes. Significantly, the government’s wheat procurement target will be lower than the initial target of 44 million tonnes and could be fixed at around 18.5 million tonnes, the lowest in a decade.
The ban has already pushed up global wheat prices, where local prices have fallen. Global wheat prices jumped 6% on Monday, hitting a new high of 435 euros ($ 453) per tonne in Europe, up from a previous high of 422 euros on Friday. In the domestic market, however, prices have dropped by 4-8% depending on the location.
“After being encouraged by the government to export wheat, large infrastructure, including food storage warehouses and wheat grain cleaning facilities, was set up by a number of private companies. More than 75% of the warehouses in the Kandla-Gandhidham area of Gujarat were full of wheat stocks, ”said KCBA’s Gupta.