Wheat export ban: Traders look at huge losses as mandi prices fall by 7%

Wheat market prices fell by 7-8% on Monday in Rajasthan, Gujarat and Delhi due to the export ban announced on Friday.

In Chittorgarh Mandi, Rajasthan, wheat prices fell more than 8% from Rs 2,325 per quintal to Rs 2,125 on Friday. Similarly in Delhi, mandi prices fell by more than 7% to Rs 2,120 per quintal. “Traders who bought wheat from farmers at Rs 150-200 per quintal more than the minimum support price of Rs 2,015 / quintal for export purposes will now have to release their stock in the domestic market,” said Mukesh Ghatod, a trader from Chittorgarh, Rajasthan.

In Sehore, one of the largest wheat markets in Madhya Pradesh, traders say trucks carrying wheat have been stopped at Mundra and Gandhidham ports in Gujarat. Mandi in Madhya Pradesh was closed on Monday. “Exporters have told us not to load wheat in vehicles,” said Gagan Gupta, a trader and commission agent at Sehore Mandi.

Wheat prices have fallen by about 8% in mandis across Gujarat since Friday. In Punjab and Haryana, where procurement activities have been largely completed, some farmers sold wheat at around Rs 2,020 per quintal on Monday, just above the MSP.

Mandis in Punjab reported the arrival of only 144 tonnes of wheat on Sunday. “The decision to ban wheat exports was timely and would increase domestic availability of grain and soften prices,” said Anjani Agarwal, president, Federation of Roller and Flower Millers Federation of India.

According to trade sources, about 5,000 trucks (each with a capacity of 25 to 30 tonnes) are waiting to unload the consignment at Kandla port, from where large quantities of wheat are being exported.

According to the Mumbai-based exporter, those who have booked their invoices but have not yet received the letter of credit will suffer huge losses. Kunal Shah, a partner at Kunal Corporation, said, “They will liquidate their stock in the local market at a much lower price.

The export ban comes at a time when traders have received orders for 4.5 million tonnes (MT) and are looking forward to further deals in the short term while maintaining the export target of 10 metric tonnes set by the government. The global wheat market is currently very volatile and prices continue to rise due to deficits caused by the Russia-Ukraine war.

Of course, the ban would not apply to two types of shipments – the Government of India exports under bilateral agreements with some countries to meet their food security needs and under the transitional system, where previously the letter of indebtedness was issued. To the prohibition
Meanwhile, Egypt on Sunday approved the import of 0.5 metric tonnes of wheat from India.

Government agencies have so far collected 18.03 metric tonnes of wheat from farmers, mostly in the major growing states of Punjab, Haryana, Uttar Pradesh and Madhya Pradesh, till Sunday – a decrease of 51% over the same period last year. The government has announced extension of wheat procurement date for Punjab and Haryana till May 31, while procurement activities will be allowed in Uttar Pradesh and Madhya Pradesh till June 15. Out of about 1,700 buying points in Punjab, 1,500 have closed.