News: Union Commerce and Food Minister Piyush Goyal’s stated optimism about India’s wheat exports scaling a new high in FY23, though his projection of the volume of likely shipments being around 10 million tonnes seems rather modest.
What are the new opportunities for Indian exports?
Russia-Ukraine war: Russia and Ukraine together normally account for 25-30% of the wheat supplies in the global market. The void caused by their absence can be filled to a sizable extent by India.
Most wheat-importing countries, particularly those in Africa, West Asia, and Southeast Asia are now looking towards India to meet their requirements.
States such as Madhya Pradesh, Uttar Pradesh, and Gujarat, are already making special efforts to boost exports. The Railways has assured them of full support to move the cargo to Kandla and other ports on priority.
What is India set to gain from these exports?
Food exports are now a dire necessity rather than merely an opportunity-driven initiative. This is because the country’s food grain output has consistently outpaced consumption.
Wheat prices in the international market are now ruling substantially higher than the domestic prices. It allows exporters to buy stocks from farmers at rates far above the minimum support price (MSP) and yet have a sufficient profit margin.
This would also help trim official grain stockholding to a manageable size to rein in the ever-burgeoning food subsidy.
Way Forward:
India should grab this export opportunity to create the much-needed export outlet for the surplus grains.
Source: This post is created based on the article “Export Opportunity” published on 7th April 2022 in Business Standard.
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