India allows 'some relaxation' of wheat ban
Traders can meet prior commitments, says ministry as shipments left stranded at ports
Sign up now: Get insights on Asia's fast-moving developments
NEW DELHI • India is allowing "some relaxation" of its order restricting wheat exports to allow traders to meet prior commitments, according to the trade ministry yesterday.
Futures fell as much as 3.8 per cent in Chicago before paring losses.
Wheat consignments that have been handed over to Customs for examination, and registered in their systems on or before May 13, will be cleared for export, the ministry said in a statement.
The government has also given the green light for a 61,500-tonne shipment to sail from Kandla port to Egypt following a request from that government, it said.
India, in a government order dated May 13, restricted wheat exports to avoid a domestic supply squeeze. In the notification, it allowed exceptions only for prior commitments made by private traders through irrevocable letters of credit, and for exports to countries that require wheat for food security needs, based on the requests of their governments.
Shipments were curbed after record heat slashed production and drove up domestic prices. Traders have contracted to export 4.5 million tonnes so far in 2022-23, the food ministry said.
The snap announcement led to chaos at the port in Kandla in Gujarat, where about 4,000 trucks are stuck in queues outside, according to the port operator.
Four ships partially loaded with about 80,000 tonnes of wheat are also docked at the facility.
The Gandhidham Chamber of Commerce and Industry estimated that 400,000 tonnes of wheat from Punjab, Haryana, Madhya Pradesh and other wheat-growing states were stranded.
Between 500 and 700 warehouses near the port were "full of wheat for export", said Mr Teja Kangad, president of the chamber.
The government should have given prior notice before announcing the ban, he said.
"This has led to a chaotic situation where truckers and traders are left uncertain of what will happen to the goods. Also, wheat being a perishable commodity, it can't be kept in the open for long," Mr Kangad told AFP.
India had previously said it was ready to help fill some of the shortages caused by Russia's February invasion of Ukraine, which had accounted for 12 per cent of global wheat exports.
While India is a small exporter, its assurances of supplies from its large buffer stocks had provided some support to global prices and soothed fears of major shortages.
The decision to halt wheat exports highlighted domestic concerns about high inflation, and added to a growing wave of food protectionism worldwide caused by rocketing crop prices.
Indonesia has banned palm oil exports, while Serbia and Kazakhstan imposed quotas on grain shipments.
The wheat ban has drawn criticism from the Group of Seven nations. The United States said it hoped India will reverse the wheat ban. "We're encouraging countries not to restrict exports because we think any restrictions on exports will exacerbate the food shortages," Ms Linda Thomas-Greenfield, US ambassador to the UN, said during a ministerial gathering on food security ahead of a meeting of the UN Security Council.
BlOOMBERG, AGENCE FRANCE-PRESSE