ECONOMY

India’s wheat exports set for a four-fold leap in 2021 on huge Asian demand

India’s wheat exports in 2021 could quadruple from a year ago to the highest level in eight years as a rally in global prices and higher freight costs make Indian wheat lucrative for Asian buyers, reveals a Reuters’ report, quoting two industry executives.  


Higher exports would help the world’s second-biggest producer bring down record inventories and provide Asian buyers with cheaper supplies amid a rally in global prices due to limited supplies from major exporters such as Russia and Canada. 


India’s wheat exports could rise to 4.2 million tonnes (mt) this year, the highest since 2013, Olam Agro India Vice-President Nitin Gupta, told the Reuters. “There is good demand for Indian wheat for human consumption and feed purpose as well,” Mr Gupta said. A Mumbai-based grains dealer with a global trading firm, who declined to be named, said exports could reach 4.4 mt. 


In the first eight months of 2021, India’s exports surged 887 per cent from a year ago to 3.07 mt on good demand from Bangladesh, Sri Lanka, Indonesia, Nepal and the United Arab Emirates, according to data compiled by the trade ministry. The bulk of exports last year were in the final four months. 


In recent deals, two cargoes of around 1,00,000 tonnes of Indian wheat were sold to flour millers in Indonesia, while one cargo of about 50,000 tonnes was bought by feed-makers in the Philippines, a Singapore-based grain trader said. “On C&F (cost and freight) basis, Indian wheat is competitive in the Asian market,” he said. Asian buyers saved $10 to $15 on freight when they bought from India rather than Russia or Ukraine, said the Mumbai-based dealer. 


India harvested a record 109.52 mt of wheat in 2021, and State-run agencies are holding a record 51.8 mt, more than double the required buffer norm. A surge in exports had lifted Indian prices to $305 per tonne on a free-on-board (FOB) basis, compared to $260 three months ago, said Mr Gupta. “Even after the price rise, Indian wheat is cheaper. Until mid-2022 exports would continue at the current pace,” he added.

Report By