Indian Wheat Export- Yes, No, Maybe, Maybe Not - By Dr B K Singh & Ruchi Sinha

 

Recent ban on wheat export has come as a jolt for traders and farmers. The decision was taken under the purview of India’s food security concerns, in the wake of the sudden hike in domestic prices, Government decided to ban export of wheat.

Later the ban was relaxed to accommodate genuine wheat export contracts backed by SWIFT certified LCs established before the ban kicked in. Euphoria among farmers to have received prices well above MSP for the first time in many years soon evaporated.

One of the stated reasons for export restrictions is lower expected production during 2021-22 season because of unusually hot temperature in Feb-Mar 2022.

We BKC set out to analyze the losses in yield because of hot weather.

We BKC are connected with farmers in one-to-one basis through our App Fasal Salah for day-to-day advisories. We also run crop model for their crop which calculates expected yield in run time from sowing until harvest. We ran sample analysis for over hundred farmers and found no evidence of yield loss on account of hot weather during maturity in all major producing states of Uttar Pradesh, Haryana and Madhya Pradesh.

Analyzed yield for some sample farmers can be seen as under.

Therefore, the general conclusion being drawn that heat wave has affected the crop yield does not seem to be a correct conclusion.

Farmers seem most affected by sudden ban on wheat exports. Prices in local mandis have declined a bit but still holding firm as market arrivals are lower. Farmers are continuously watching the Stop-Go situation to sell their produce in the market. Generally, they are holding the stock in hope that prices will rise in the future. But the decision to stop wheat export suddenly seems to be hurting wheat farmers and has put exporters having firm export contracts under stress as well.

Talking about the procurement by FCI, it has set the deadline to 31^st May in various mandis to complete the procurement and may extend the deadline if the procurement goal is not met.

A number of traders and exporters are facing problems of cancellation of their orders on mandis while Govt. of India has initiated action against exporters whose export orders are supported by bogus LCs at the same time.

Both farmers and exporters seem to be losers.