At least 1.75 lakh tonnes of wheat stocks held up at warehouses near various ports across the country after the Centre banned exports on May 13 last year have been sold in the domestic market This is after wheat prices soared to record highs.

“At least 2.25 lakh tonnes had been held at various ports, mainly Kandla and Mundra after the government banned exports last year. Of this, about 50,000 tonnes were exported since exporters had signed the deals before the ban,” said a trader without wishing to identify.

Quality intact

The rest had been held at the warehouses of mainly multinational trading houses such as ITC, AgroCorp, Louis Dreyfus, Viterra, Olam International, Gujarat Ambuja and Bagadiya Brothers. “The wheat was maintained well in the warehouses by exporters and their quality was intact. Though some of them incurred losses, they were bearable,” said New Delhi-based exporter Rajesh Paharia Jain.

The wheat from the warehouses was sold to flour mills in Gujarat, Rajasthan and South India, he said.

The reason for some of the exporters incurring losses was that they had to sell at a price lower than their procurement cost. Many exporters bought wheat at nearly ₹26,000 a tonne and some of them sold the stocks at ₹22,000 in August.

Wholesale, APMC yard prices

However, others have been able to break even at least with prices topping ₹30,000 earlier this week. According to traders, wheat is quoted at over ₹28,500 in Madhya Pradesh and over ₹31,000 in Uttar Pradesh.

Data from Agmarket, a unit of the Agriculture Ministry, show that the wholesale price of wheat has soared to ₹2,930.31 a quintal this week. During the same time a year ago, the price was ₹2,099.31. 

On Tuesday, the national weighted average price of the cereal that arrived at various agricultural produce marketing committee (APMC) yards surged to ₹2,853 a quintal.

Wheat prices have been zooming since March last year after the Ukraine war broke out. It led to demand for Indian wheat in the global market as Russia and Ukraine account for 30 per cent of the supply in the global wheat market. 

Dip in production

At least 7 million tonnes are reported to have been exported from the time the war broke out till May 13 when shipments were banned. Apart from wheat exports increasing, India was faced with a lower crop due to a heatwave sweeping across the country during March.

As a result, production last year dropped to 106. 84 million tonnes (mt) from the initial estimate of 111.34 mt and from 109.59 mt in 2021.

In addition, procurement by the Food Corporation of India (FCI) plunged by 57 per cent to 17.96 mt last year against 43.44 mt in 2021. Wheat stocks with FCI, as of January 1, were at a six-year low of 17.17 mt against the mandatory requirement of 13.8 mt, including 3 mt of strategic reserve.

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