Commerce Dashboard

Go Back

India's wheat exports could quadruple to 8-year high as global prices rally

IBEF:  October 07, 2021

According to two industry officials, India's wheat exports in 2021 could four-fold from a year ago to the highest level in eight years as a march in global prices and higher freight costs make Indian wheat lucrative for Asian buyers, reported by Reuters.

Elevated exports would help the world's second biggest wheat producer bring down record inventories and provide Asian buyers with cheaper supplies in the midst of a march in global prices owing to constrained supplies from key exporters such as Russia and Canada.

India's wheat exports could rise to 4.2 million tonnes in 2021, the highest since 2013, Mr. Nitin Gupta, vice president at Olam Agro India, told Reuters.

“There is decent demand for Indian wheat for human consumption and feed purpose as well,” Mr. Gupta stated.

A Mumbai-based grains trader with an international trading firm, who refused to be named, said exports could reach 4.4 million tonnes.

In the first eight months of 2021, India's exports surged 887% from a year ago to 3.07 million tonnes on great demand from Bangladesh, Sri Lanka, Indonesia, Nepal and the United Arab Emirates, according to data recorded by the trade ministry. The majority of exports last year were in the last four months.

In latest deals, two cargoes of ~100,000 tonnes of Indian wheat were traded to flour millers in Indonesia, while one cargo of ~50,000 tonnes was purchased by feed makers in the Philippines, one Singapore-based grains trader told.

“On C&F (cost and freight) basis Indian wheat is economical in the Asian market,” he stated.

Asian buyers save US$ 10 to US$ 15 on freight when they purchase from India instead from Russia or Ukraine, believed the Mumbai-based dealer.

India harvested a record 109.52 million tonnes of wheat in 2021 and state-run firms are storing a record 51.8 million tonnes, more than two-fold the required buffer norm.

A rise in exports has raised Indian prices to US$ 305 per tonne on a free-on-board (FOB) basis, equated to US$ 260 three months back, said Mr. Gupta of Olam.

“Even after the price rise Indian wheat is not expensive. Until mid-2022 exports would continue at the current pace,” he added.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.