Wheat markets. Sudan, Thailand new wheat buyers as India expands export basket

With India already exporting to five of the world’s top 10 wheat importers, it now sees ample scope to ship the grain to the other five in the list, as shipments of all agricultural products from the Black Sea have come to a halt due to the Russia-Ukraine conflict. 

“Egypt, Indonesia, Turkey, China, Nigeria, Italy, Algeria, Philippines, Japan, Morocco, Brazil, Bangladesh, Korea, Netherlands and Spain are the top importers of wheat. We are already exporting to  Bangladesh, Indonesia, Philippines, Nigeria and Japan,” Agricultural and Processed Food Products Export Development Authority (APEDA) Chairman M Angamuthu told BusinessLine.

APEDA, an arm of the Commerce Ministry, supervises exports of agricultural products, including poultry and meat.

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“There is significant scope for India to increase its export base in major wheat importing countries,” he said. 

Deals to ship 1 lt of wheat flour  

Exporters said wheat shipments from the country have picked up of late and this includes wheat flour. 

According to Rajnikanth Rai, Divisional Chief Executive, ITC Agri-Business, at least 10 lakh tonnes (lt) of wheat export deals have been struck since Russian troops entered Ukraine on February 24. 

Nitin Gupta, Vice-President, Olam Agro India Ltd, said over 5.5 lt of wheat had been sold for exports in the past 25 days. 

“Wheat exports have begun to pick up slowly. There is now a movement to Vietnam,” said Sagar VR, Director, Bulk Logix. He said at least one lt of wheat had been contracted for exports from Kandla port, Gujarat, this month and in April. 

Indian wheat is being offered at $335-350 a tonne free-on-board (f.o.b) for exports now, Rai and Gupta said. Sagar said earlier deals had been struck at $350-360 f.o.b and $420-430 cost and freight. Wheat flour export deals have been struck at $380-390 a tonne f.o.b.

50 per cent rise YTD

On the Chicago Board of Trade, benchmark wheat futures are quoted at $11.24 a bushel ($413 a tonne). Wheat prices have surged 50 per cent since the beginning of this year, with the bulk of the hike after February 24. This has turned the focus on Indian wheat, which is traded at a discount to other origin wheat. 

According to the International Grains Council, Argentine wheat is quoted at $401 f.o.b, while EU wheat (France) is ruling at $429. US hard red winter and soft red winter wheat are offered at $476 and $444, respectively. Australian wheat is quoted at the levels of Argentine wheat.

Angamuthu said Bangladesh, UAE, Qatar, Sri Lanka, Oman and Malaysia were driving Indian wheat exports higher but APEDA is now looking at some new emerging markets. 

“We are looking at Yemen, Afghanistan and Indonesia, which had imported substantial quantity during 2020-21,” he said. 

Vietnam, Djibouti

ITC’s Rai said Thailand and Sudan have turned out to be the new buyers of Indian wheat now. Bulk Logix’s Sagar said small shipments of milling wheat were being exported to Vietnam and Djibouti. 

“India could also export to Ethiopia and Egypt,” he said. 

APEDA clearly sees Egypt as one country where India has scope to increase its wheat exports. Cairo buys near 70 per cent of its wheat requirement from Russia and another 20 per cent from Ukraine. In contrast, it does not buy any wheat from India.

“There is an increase in demand in general from countries which were importing from India (after the conflict intensified). India is pro-actively approaching countries for completing pest risk analysis, wherever required, and increasing exports, especially to the ones which bought from Russia and Ukraine,” Angamuthu said. 

Exports soar

During the April-January period of the current fiscal, wheat exports had soared to 60.2 lt, valued at $1.7 billion, compared with 13.78 lt, valued at $358 million, a year ago. The US Department of Agriculture has estimated wheat exports this fiscal at a record 10 million tonnes. 

APEDA is coordinating with missions and holding regular meetings with stakeholders to increase exports, he said. 

On the other hand, the Commerce Ministry has taken up the issue of promoting exports with the ministries of Agriculture, External Affairs, Consumer, Food and Public Distribution, and Ports, Shipping and Waterways. 

Most of the Egypt tenders were going to Ukraine and could be the ones India can target, said Bulk Logix’s Sagar. 

The Commerce Ministry, in a note, said that though the overall trade in agriculture would be affected by the Russia-Ukraine crisis, many opportunities would emerge for India from it. 

Eyeing opportunity

One of the opportunities it sees is on the wheat export front, with Russia and Ukraine making up 30 per cent of the global trade. It does not see any problem in domestic exports in view of the Food Corporation of India (FCI) having higher than the mandatory 44.6 lt operational stock and 30 lt strategic reserve as on April 1, and a record wheat production on the cards.

According to FCI data, government-owned warehouses currently stock 23.4 million tonnes of wheat and this could be above 20 million tonnes on April 1. The Agriculture Ministry, in its second advance estimate of foodgrain production for the July 2021-June 2022 season, has pegged wheat production at a record 111.32 million tonnes against 109.59 million tonnes last season. 

Egg exports

The ministry also sees corn exports from Ukraine, which account for 13 per cent of global exports, being affected by the conflict and thus affecting poultry farmers in the country.

In order to overcome high production costs (other inputs such as edible oil and soyameal are also ruling high), the ministry has called for mobilising the Namakkal egg hub to export eggs to West Asia, especially Oman and the UAE. 

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