Exports of wheat from India have slowed down in recent weeks as buyers,mainly from the Far-East, are switching over to the cheaper grain from the Black Sea region where harvest has begun in countries such as Russia and Ukraine.
High supplies
Trade sources said the Indian wheat is currently expensive by at least $25-30 per tonne compared with the Black Sea region.
The higher than expected supplies has made the wheat cheaper from Black Sea aided by a depreciating currencies in countries such as Ukraine and Russia. Also, the political turmoil in Ukraine has not had a major impact on the shipments from the region.
On f.o.b basis, the Black Sea wheat is being contracted at around $245-250 per tonne for delivery in July, August and September by buyers in Philippines and South Korea, whereas the Indian wheat is traded at around $270.
Other options
“If India has to remain active in the export market, then it has to calibrate prices in line with the Black Sea region,” said Tejinder Narang, grains trade analyst.
He said that India should look at encashing opportunities in neighbouring countries such as Bangladesh, which imports as much as three million tonnes annually.
Procurement targets
So far, the Indian wheat exports are estimated to be around two million tonnes.
Bulk of these shipments have been done by the private trade, while the state trade agencies have shipped out wheat approved for exports last year.
The NDA Government is yet to take a call on allowing wheat shipments from the Central pool stocks, which stood at 41.5 million tonnes on June 1, more than twice the buffer and strategic reserve norms.
According to the Food Corporation of India, the Government agencies have so far procured 27.92 million tonnes against last year’s 25.02 million tonnes.
With the procurement season almost ended, the overall figures may stand at around 28 million tonnes, short of the targeted 31 million tonnes for the year.
Wheat exports for 2013-14 stood lower at 5.55 million tonnes against 6.51 million tonnes in the previous year.
The wheat shipments were valued at $1.56 billion (₹9,257 crore) during 2013-14 as against $1.93 billion (₹10,529 crore).