Agri Business

India’s wheat export ban comes under fire once again at WTO

Amiti Sen | Updated on: Jun 29, 2022
A worker silhouetted against sunlight sorts wheat grain at a grain market, in Jalandhar  (file photo)

A worker silhouetted against sunlight sorts wheat grain at a grain market, in Jalandhar (file photo) | Photo Credit: -

US, EU, Japan allege ban rattled food market; India says blame unfair

India’s wheat export ban has come under fire once again at the WTO in the first agriculture meet following the recently concluded Ministerial Conference in Geneva with seven members, including the US, the EU, the UK, Japan and Canada, alleging that the ban had further rattled the global  food market.

They further said the ban may not be actually necessary going by production forecasts for 2022-23 made by institutions, including the US Department of Agriculture, according to a Geneva-based trade official.

Defending its decision to impose export restrictions, India said the global price hikes were mostly due to large buyers’ behaviour and  it was unfair to blame it for the same as it was not a  major wheat exporter, the official added.

Prices shot up

India also pointed out that wheat prices returned to their usual range one week after the measure was announced. New Delhi’s comment was in reaction to the seven countries, which also included Brazil and Paraguay, claiming that global wheat prices shot up by 6 per cent on the first day of trading on the Chicago Board of Trade wheat futures following the Indian announcement on wheat export ban on May 13 2022.

“The Group of Seven stated that they doubted if a ban on wheat exports was necessary because various institutions, including the USDA, are forecasting that India is likely to produce almost 100 million tonnes of wheat in 2022-23 (April-March), which was well above the average annual volume of production achieved during the five years to 2020 of 96 million tonnes (FAO numbers),” the official told BusinessLine.

New Delhi had banned wheat exports after unseasonal heat wave affected the crop and increased domestic prices. India’s wheat production in the 2021-22 crop season, ending June, is estimated to be around 106.41 mt, which is 3.8 mt less than the previous year’s output, per the Agriculture Ministry. It is also lower than the projected 111.32 mt for 2021-22. However, it is higher by 2.53 mt than the last five years’ average wheat production of 103.88 mt.

Victims of export ban

At the WTO’s Committee of Agriculture meeting, the US projected Bangladesh as one of the victims of India’s export ban as it would earlier pay less than $400 per tonne for Indian wheat and was now pushed to procure from more expensive sellers, the official said.

Japan reminded India of the new MC12 declaration on food security which reaffirmed the importance of keeping trade flowing while Thailand insisted that India should clarify how long it intended to continue with the ban.

“India said that in due course it will notify a policy which would come up with specifics and also that the condition of implementation of the existing measure had been explained in the notification issued by Directorate General of Foreign Trade in May 2022,” the official said.

Before the heat wave affected the wheat crop, India was hoping to export a record 10 mt of wheat in 2022-23, compared to 7.86 mt the previous year.

Published on June 29, 2022
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