To control the rising prices domestically, the export of wheat has been banned with immediate effect.
New Delhi: India has banned the export of wheat with immediate effect as part of measures to control rising prices domestically. This information has been received from the official notification.
However, the Directorate General of Foreign Trade (DGFT) said in a notification issued on May 13, “The export of consignments for which irrevocable letters of credit (LoCs) have been issued on or before the date of this notification will be allowed.”
DGFT said, “The export policy of wheat is banned with immediate effect.”
It also clarified that export of wheat would be allowed on the basis of permission granted by the Government of India to other countries to meet their food security needs and based on the request of their governments.
In a separate notification, DGFT announced easing of export conditions for onion seeds. DGFT said, “The export policy of onion seeds is kept under limited category with immediate effect.” Earlier the export of onion seeds was banned.
Official data released this week showed retail inflation hit an eight-year high in April on the back of higher fuel and food prices.
The export ban has been imposed in the wake of disruption in global supply of wheat due to the war between Russia and Ukraine. Russia and Ukraine are major exporters of wheat.
Due to strong global demand, India’s wheat exports increased to 7 million tonnes or US$ 2.05 billion in 2021-22.
According to DGFT data, out of the total wheat exports in the last financial year, around 50 per cent of the consignments were sent to Bangladesh. The country exported around 9,63,000 tonnes of wheat this year as against 1,30,000 tonnes in the same period last year.
India was expected to export 10 million tonnes of wheat in 2022-23. The commerce ministry had recently said that India would send business delegations to nine countries—Morocco, Tunisia, Indonesia, Philippines, Thailand, Vietnam, Turkey, Algeria and Lebanon—to explore possibilities of boosting wheat export consignments.
India’s wheat procurement has also declined by 44 per cent to 1.62 lakh tonnes in the current Rabi marketing season till May 1 due to heavy lifting by private traders and less arrivals in Punjab-Haryana. The government had procured 2.88 lakh tonnes of wheat in the year-ago period. Rabi marketing season runs from April to March.
Private companies have bought wheat at a price higher than the Minimum Support Price (MSP) amid rising demand for food grains for export. The Center has set a target to procure a record 4.44 lakh tonnes of wheat in the marketing year 2022-23, as against 4.33 lakh tonnes in the previous marketing year.
The Center has stopped the sale of wheat under the Free Market Sales Scheme (OMSS) to bulk consumers amid low procurement for the central pool and asked them not to wait for the scheme to launch to buy the grain.
Significantly, recently the government has reduced the wheat production estimate by 5.7 percent to 105 million tonnes for the crop year 2021-22 ending in June. Earlier the wheat production was estimated to be 11.13 million tonnes.
The reason for the fall in the estimate was attributed to the impact of crop productivity due to early onset of summer.
According to the Indian Express, Chief Agricultural Economist Ashok Gulati said, ‘This is an anti-farmer step taken in the name of so called poor consumer. Had the government been so worried about inflation, it could have reduced exports gradually instead of resorting to stringent restrictions. This could take the form of a minimum export price (below which shipments cannot take place) or a tariff.
“Export restrictions may also compel those farmers, who have withheld their crops in the coming months expecting a hike in prices, to sell them at MSP to government agencies,” he said.
Gulati said, “Government procurement has fallen mainly because farmers are getting higher prices by selling them to private traders and exporters. If short procurement and falling public stock were indeed a matter of concern, then who is stopping the government from giving farmers a bonus of Rs 200-250 on MSP (Rs 2,015 per quintal)? If they still do so, surely farmers will bring more wheat to them. The ban on exports is an implicit tax on farmers.
Terming the government’s move to ban wheat exports as “anti-farmer”, the Congress on Saturday claimed that the government did not procure enough wheat, leading to a situation that led to a ban on exports.
Senior party leader and former finance minister P. Chidambaram told reporters, “I believe that the central government has failed to procure enough wheat. It is not that the yield of wheat has decreased. Overall it is the same as before. There may have been a slightly higher yield than before.
He said, ‘This is an anti-farmer move. I am not surprised because this government has never been farmer friendly.
Chidambaram said if sufficient procurement had been made, there would have been no need to ban the export of wheat.
According to news agency PTI, Chidambaram said, ‘Banning the export of wheat is an anti-farmer measure. This deprives the farmer of the benefits of higher export prices. This is an anti-farmer measure.
Chidambaram said that on Friday, a minister from Chhattisgarh told him that the government there had procured 97 lakh tonnes of paddy.
India’s farming society unhappy with the decision to ban wheat export
Farmers’ organization Bharat Krishak Samaj (BKS) on Saturday expressed unhappiness over the ban on wheat exports, saying that banning the export of agricultural products is like an ‘indirect’ tax for farmers.
BKS said that due to this move of the government, farmers will not be able to take advantage of higher global prices and India will also lose its credibility as a reliable trading partner.
BKS President Ajay Veer Jakhar said, “It is sad that India has banned wheat exports. Banning the export of agricultural products is an indirect tax for farmers.
He said that due to imposition of restrictions, the basic price of agricultural products comes down and farmers are not able to get the benefit of rising prices of commodities even after paying higher cost.
Jakhar said, ‘Today not only traders but farmers will also lose their stock of wheat. It is because of such restrictions on exports that farmers do not rely on market reforms. This further breaks trust.
He said that in view of the skyrocketing prices of food items across the world, the United Nations has also appealed to the countries not to make such sudden announcements. Due to this move, India will also lose confidence as a trading partner.
(with input from news agency language)
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