After rice, India is set to turn a major exporter of wheat
After rice, India is set to turn a major exporter of wheat as well - thanks to surging international prices from Chinese stockpiling and ultra-low interest rate money increasingly finding its way into agri-commodity markets.
The US Department of Agriculture (USDA) on Tuesday upped its forecast of Indian wheat exports for 2020-21 (July-June) to 1.8 million tonnes (mt), as against its earlier estimate of one mt. That would be the highest ever in the last six years.
The trebling of shipments this year is mainly on the back of rising global prices. Wheat future contracts for March delivery at the Chicago Board of Trade exchange are currently at $244.35 per tonne, 18.3% higher than the $206.59 a year ago.
This opens up possibilities for Indian exports to nearby markets, especially Bangladesh that buys mostly from Russia.
With the Russia government levying a 25 euros-per-tonne export tax on wheat effective from February 15 - in response to high domestic prices - Bangladesh "is beginning to shift its purchases towards India", the USDA has noted in its latest world grain trade report.
Bangladesh's total wheat imports are placed at 6.6 mt in 2020-21 and the country, which imported just 80,000 tonnes in 2020, is expected to buy one mt this year.
The beneficiary of it will again be India. "Despite concerns about the availability of shipping containers, which is impacting rice exports from Vietnam and Thailand, India can export to Bangladesh via rail and truck," the report added.
Traders, however, believe that Indian wheat is still not competitive at the government's minimum support price (MSP) of Rs 19,750 per tonne. The export price of wheat bought in Gujarat at that rate - after adding roughly Rs 1,200 towards cost of cleaning, bagging, loading and transport to Kandla or Mundra port - would be Rs 20,950 per tonne. -The Indian Express