India bans wheat export with immediate effect
Bangladesh is the top destination of wheat exports from India
The Indian government has banned wheat exports to curb rising domestic prices and address the needs of neighbouring and vulnerable countries.
The country is the world's second-biggest wheat producer and exported a record seven million tonnes of the grain in FY2021-22.
Bangladesh is the top destination of its wheat exports. India exported 11,57,399 tonnes of wheat worth $299.4 million to Bangladesh in 2020-21 constituting 55.4% in terms of total volume of India's total wheat exports.
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The neighbouring country was about to see an uptick in wheat export to Bangladesh following the war between two major global wheat exporters Ukraine-Russia.
However, the export shipments for which irrevocable letters of credit (LoC) have been issued on or before the date of this notification will be allowed, India's Directorate General of Foreign Trade (DGFT) said in a notification dated 13 May.
"The export policy of wheat … is prohibited with immediate effect…," the DGFT said.
It also clarified that wheat exports will be allowed on the basis of permission granted by the Government of India to other countries to meet their food security needs and based on the request of their governments.
Speaking with The Business Standard, Citigroup Director Biswajit, said, "Prices [of wheat] may go up again following the Indian ban on exports. Although wheat prices, already up due to the Russia-Ukraine War, haven't directly affected the flour market.
"But prices of various bakery products have shot up. Food manufacturers are being forced to raise prices.
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He said, "When available, one can buy items from the international market despite high prices. But things become very difficult when there is a supply crunch. This is why we have to better our negotiation efforts with the [supply] sources that we currently have.
"Russia banned exporting wheat due to war. As a result, Bangladesh increased its imports from India amid the global supply crisis.
"Now India has banned exports of the essential grain. Wheat imported from Canada and Australia, as alternative sources, is now the best in quality. It costs around $560 for a tonne of Canadian wheat," the Citigroup director added.
In a separate notification, the DGFT announced the easing of export conditions for onion seeds.
"The export policy of onion seeds has been put under the restricted category, with immediate fact," it said.
The export of onion seeds was prohibited earlier.
