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Current Affairs

India bans Wheat export

Date: 18 May 2022 Tags: Miscellaneous

Issue

To control food prices in the domestic market, the government has banned export of wheat.

 

Background

Wheat prices have witnessed a rise to Rs 29.49 per kg on May 9, compared with Rs 24.71 per kg a year ago.

 

Details

  • The wheat prices have increased by over 40 per cent since the beginning of the Russia-Ukraine war.

  • Retail flour prices have shot up by 14.27 per cent to Rs 32.91 per kg from Rs 28.8 per kg in the comparable period.

  • The daily average price of wheat rose 21.55 per cent to Rs 25.82 per kg on May 9 compared with Rs 21.24 per kg in the year-ago period in wholesale market.

 

Reasons for ban

  • The move of banning exports of wheat will control food prices, strengthen the food security of India and countries facing a deficit.

  • The decision by the government to ban exports is expected to cool down the domestic prices in a week or so.

  • The wheat production of India has been revised lower to 105-106 million tonnes for the 2022-23 crop year (July-June) from an earlier estimate of 111 million due to heatwave.

 

Role of Ukraine war

  • Russia and Ukraine are some of the biggest wheat exporters. The war has resulted in blockade of Black Sea ports.

  • People involved in farming have been forced to relocate. Harvesting and exporting infrastructure has crumbled.

 

Exemptions given

  • Wheat shipments with valid irrevocable letters of credit (LoC) have been given go ahead for exporting the commodity.

  • If Government of India approved a request by other governments to meet their food securities needs.

 

Wheat production in India

  • India is the world’s second-largest wheat producer, and has about 10 per cent of the grain reserves of the world.

  • Wheat is majorly grown in states of Punjab and Haryana apart from states such as Uttar Pradesh, Madhya Pradesh and Rajasthan.

 

India’s wheat export plans

  • India had planned to export 10 miilion tonnes of wheat grains to new markets of Europe, Africa and Asia.

  • The wheat export ban is not permanent and could be revised in case situation improves in the country.