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India bans wheat of export

by Business News Report

India’s Ministry of Commerce and Industry’s Directorate General of Foreign Trade issued notification No 06/2015-2020 prohibiting exports of all wheat (ITC HS categories 1001, 100119, 10019910, and 10019920) with immediate effect. The notification cited the spike in global wheat prices and consequent risk to food security of India, neighbouring and other vulnerable countries for the export ban. The notification specifies exemptions to the ban for pending export shipments with an irrevocable letter of credit issued on or before the date of notification, and exports are also allowed with the Government of India’s permission to other countries to meet their food security needs and based on requests from these governments.

According to the report exports of wheat on humanitarian grounds as aid/assistance on a government-to-government basis shall be allowed on case-by-case basis, with the specific approval of the competent authority. Subsequently, exports of wheat consignments that have been handed over to Customs for examination or registered into their systems on or before May 13, 2022, whether tied or not to a specific L/C or other financial instrument are allowed.

The export ban is driven by domestic food security concerns due to a growing consensus that the wheat harvest now nearing completion will show a decline of 10-15% from the record 2021 wheat crop. And because of what has happened in the international marketplace since Russia’s invasion of Ukraine in terms of rising wheat prices and, in turn, in India in terms of the significantly lower GoI wheat procurement for domestic food security programs, the decision to prevent new export business was made. The smaller-than-expected wheat harvest coupled with strong export demand due to recent global market developments fueled domestic wheat prices from the beginning of the marketing season in April. Market prices of wheat have been more than 10 percent higher than last year’s level and above the government’s Minimum Support Price (MSP)- INR 20,150 or $265 per MT in major wheat growing states.

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