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The government bans the export of wheat with immediate effect to control rising domestic prices

The government has with immediate effect banned the export of wheat as part of measures to control rising domestic prices, according to an official statement.

The Directorate-General for Foreign Trade (DGFT) said in a statement dated 13 May that export shipments for which irrevocable letters of credit (LoC) have been issued on or before the date of this notice will be allowed

“The export policy for wheat is prohibited with immediate effect,” the DGFT said.

It also clarified that wheat exports will be allowed based on permission given by the Government of India to other countries to meet their food security needs and based on request of their governments.

In a separate announcement, DGFT announced the relaxation of the export conditions for onion seeds.

“The export policy for onion seeds has been put under the limited category, with immediate fact,” it said. Export of onion seeds was previously banned.

Official data released this week showed that retail inflation rose to its highest level in eight years in April due to high fuel and food prices.

The ban on exports also comes due to disruptions in global wheat supplies due to the ongoing war between Russia and Ukraine, which are major exporters of food grain.

India’s wheat exports rose to 7 million tonnes worth $ 2.05 billion in 2021-22 due to strong global demand. Of the total wheat exports, about 50 percent of the shipments were exported to Bangladesh in the last fiscal year, according to DGFT data.

The country exported about 963,000 tons of wheat this year against 130,000 tons in the same period last year.

India sought to export 10 million tonnes of wheat in 2022-23. The Ministry of Commerce recently stated that India would send trade delegations to nine countries – Morocco, Tunisia, Indonesia, the Philippines, Thailand, Vietnam, Turkey, Algeria and Lebanon – to explore options to increase wheat shipments.

India’s wheat purchases have also fallen sharply by 44 percent to 16.2 million tonnes per year. May 1 in the current Rabi marketing season due to heavy lifting from private traders and low arrivals to Punjab and Haryana.

The government had purchased 28.8 million tonnes of wheat in the period last year. Rabi marketing season runs from April to March.

Private players have bought wheat at a price higher than the minimum aid price due to increased demand for the grain for export.

The center has set a goal of purchasing a record 44.4 million tonnes of wheat in the production year 2022-23 against a record high level of 43.34 million tonnes in the previous production year.

Amid lower purchases for the central pool, the center has stopped the sale of wheat under the Open Market Sale Scheme (OMSS) to large consumers and asked them not to wait for the resumption of the grain purchase scheme.

Wheat production is set at a record high of 111.32 million tonnes in the harvest year 2021-22 (July-June), according to the Ministry of Agriculture’s second preliminary estimate.

(With PTI inputs)

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