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US-based multinational food firm Cargill on Wednesday said it has met all its obligations with Indian wheat traders and brokers, denying allegations that it had cancelled its contracts with domestic traders following the Centre’s ban on wheat exports.
Simon George, President, Cargill India told BusinessLine, “Let me make it very clear. Cargill is an organisation that keeps its commitment. Out of the total procurement we did, if I am right, less than one per cent of the orders has been washed out.”
Stating that he was happy to comment on the issue after it was alleged that Cargill was one of the firms that had cancelled its contracts with domestic traders, George said the orders that were cancelled were done through mutual agreement with its suppliers.
“We met all our obligations and unloaded all our cargoes which arrived at the ports. There are no two ways for us,” he said.
Why the ban
India banned exports of wheat on May 13 after the grain’s production was affected by the heatwave that swept across the country in March and April, while the Food Corporation of India (FCI) was unable to procure even 50 per cent of the target set for this year for buffer stocks and distribution through the public distribution system.
This was due to open market prices ruling higher than the minimum support price of ₹2,015 a quintal in view of a huge demand for exports. The Russia-Ukraine war had resulted in good demand for Indian wheat as supplies from both the erstwhile Soviet Union members got affected.
Russia and Ukraine supply nearly 30 per cent of wheat in the global market and making up for the deficiency is a big ask. This resulted in wheat prices doubling and touching an 11-year high last week.
With wheat and flour prices rising in the domestic market, India banned wheat exports as inflation was also soaring. The ban caught exporters by surprise resulting in trucks laden with wheat being stranded at the ports and subsequent cancellation of contracts.
ITC, in a letter to its traders and brokers, said it was forced to declare a force majeure in view of the export ban.
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