India to allow wheat shipments awaiting customs clearance, says government

India last week ordered that traders could not enter into new export deals without government approval. PHOTO: AFP

NEW DELHI/AHMEDABAD  (REUTERS, AFP) - India will allow overseas wheat shipments awaiting customs clearance, the government said on Tuesday (May 17), allowing some relaxation in exports after New Delhi banned overseas sales of the staple on Saturday.  

India will also allow wheat exports to Egypt, the statement said. 

Hundreds of thousands of tonnes of wheat had been stranded at a major port in India on Tuesday after New Delhi's surprise ban on exports over inflation and food security worries.

India, the world's second-largest grower of wheat, last week ordered that traders could not enter into new export deals without government approval.

The snap announcement has 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 about 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 wheat ban has drawn criticism from the Group of Seven nations worried about protectionism as inflation soars in the wake of the Ukraine war.

India had previously said it was ready to help fill some of the supply shortages caused by Russia's February invasion of Ukraine, which had accounted for 12 per cent of global exports.

The United States hopes India will reverse its ban on wheat exports, Washington’s top diplomat to the United Nations Linda Thomas-Greenfield said on Monday, warning the move would worsen global shortages of the commodity.

“We’re encouraging countries not to restrict exports because we think any restrictions on exports will exacerbate the food shortages,” said the top diplomat during a ministerial gathering on food security ahead of a meeting of the UN Security Council.

The UN meeting – to be chaired by US Secretary of State Antony Blinken – will include India’s Minister of State for External Affairs Vellamvelly Muraleedharan.

India holds a non-permanent seat on the UN Security Council.

Ms Thomas-Greenfield hopes that the Indian government would reconsider the decision as it hears concerns raised by other countries.

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.

India's wheat production has been hit by searing temperatures - the country recorded its warmest March on record - prompting the government to predict output would fall at least 5 per cent this year from 109 million tonnes in 2021.

Wheat prices surged to a record high on Monday, jumping to US$453 per tonne as the European market opened.

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