A private trader in Egypt has bought the 56,877 tonnes of Indian Durum wheat rejected by Turkey earlier this week, trade officials in the know said.

“The crew of the ship was ordered to empty it at nearby Yemen or any other buyer nearby. But an Egyptian trader bought it and the ship is now heading towards that African country,” an official, who did not wish to be identified, said. 

This will involve an additional shipping cost of $12 a tonne. 

Centre holding a probe

Turkey had rejected the Indian Durum wheat consignment on the ground it contained Rubella disease, a surprising development since it occurs only in humans. The shipment was sold by Indian conglomerate ITC Ltd to a Dutch trader. In turn, a Turkish firm bought the wheat and both the sellers had received the payment. The wheat was accepted at the port of loading after the buyer had checked the quality.

Commerce and Industry Minister Piyush Goyal told the media in New Delhi on Friday that the wheat was cleared as per Netherlands Foods and Agricultural Import regulations and the Centre has begun a probe into the whole issue. 

“The Letter of Credit came from the Netherlands and the wheat met all the testing requirements. The wheat was to head for Holland but we have no knowledge of when it was diverted and who diverted it. Even ITC was unaware of this until reports said it had sold the consignment,” the minister said. 

Reasons for rejection

Trade analysts say there are a couple of reasons why Turkey chose to reject Indian wheat. One, Ankara, particularly its president Recept Tayyip Ergodan, has been inimical to India after Article 370 that gives special status to Kashmir was scrapped by the Narendra Modi government. 

The other reason could be Turkey was doing a tit-for-tat as its poppy seed shipments were curbed by an Indian trade cartel that is backing the Chinese produce. The Narcotics Bureau has fixed a quota of 17,500 tonnes of Turkey poppy seed imports with a rider that 20 per cent advance be paid to the seller.

Exports up 5 times in April

On the other hand, such conditions are not being imposed on Chinese poppy seed and even its old crop is allowed to be imported, according to traders. 

Goyal told the media that Indian wheat was of good quality and had earned a good name. “Our exports have increased five times in April this year compared with April 2021. We have exported 14.5 lakh tonnes of wheat this April,” he said. 

The rejected wheat was shipped before India imposed a ban on its exports from May 13. The wheat has, possibly, been sourced from Madhya Pradesh, which grows the specialised grain used for making pasta and macaroni.

 India banned wheat exports from May 13 after a heatwave sweeping across the country affected wheat production and the Food Corporation of India (FCI) was unable to procure ample quantity of the grain for supply through ration shops.

Mandi prices

This was since open market prices were higher than the minimum support price of ₹2,015 a quintal in view of a huge demand for exports. Currently, the weighted average modal price (rates at which most trades take place) in various agricultural terminal markets in the domestic market is ₹2,056. 

Wheat production this year is estimated at 106 million tonnes (mt) lower than initial projections of a record 111.32 mt. The FCI procured only 18.57 mt of wheat as of May 30 against 43.44 mt last year. 

India’s wheat exports are not significant but the Russia-Ukraine war has resulted in supply shortage globally and prices soaring, leading to demand for the grain from the sub-continent. 

Russia and Ukraine make up 30 per cent of the global market and the geopolitical crisis has resulted in supplies from both nations being affected.

(With inpts from Prabhudatta Mishra, New Delhi)

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