In a world where people are more concerned than ever about food shortages and soaring prices, India's warehouses are bursting with grain, and farmers are preparing for yet another record crop.
According to the median of five estimates in a Bloomberg poll of traders, millers, and experts, the country is the second-largest worldwide producer of wheat after China, with the potential to export 12 million tonnes to the world market in 2022-23, the highest on record. This compares to shipments of 8.5 million tonnes in 2021-22, according to USDA statistics.
Skyrocketing Commodity Prices amid Russia-Ukraine War
Farm commodity prices were already skyrocketing before Russia invaded Ukraine, as drought withered worldwide harvests and demand surged, contributing to the highest-ever global food expenditures. The war has worsened issues by choking exports from one of the world's top-producing regions, cutting off more than a fifth of the world's wheat supplies.
"Indian wheat exports benefit the market in a time of limited global supply." "Vijay Iyengar, chairman and managing director of Singapore-based Agrocorp International, which deals around 12 million tonnes of grain per year, said. "It also helps to keep global costs under control." Prices would have likely risen further if India had not been exporting so much wheat."
Benchmark wheat prices in Chicago reached an all-time high of $13.635 a bushel this month following the Russian invasion, up from an average of around $5.50 per bushel in the five years leading up to the attack.
The frenzy for Indian wheat on the worldwide market
Supply constraints and rising grain prices in key exporting countries have rendered Indian wheat competitive for the first time in years. With rising stockpiles following five consecutive record crops, India has a huge exportable surplus. This is important for importers in North Africa and the Middle East, where increasing food costs sparked violent uprisings more than a decade ago.
While India has long shipped wheat to neighboring nations such as Bangladesh and other Middle Eastern markets, exporters are now expected to find clients in Africa and other parts of the Middle East.
"Practically every market, particularly those in Asia, Africa, and the Middle East, must now consider Indian wheat." "Iyengar, who has been trading commodities for over three decades, agreed. "We have never witnessed such a frenzy for Indian wheat on the worldwide market."
Big Plans For Wheat Export
According to the commerce ministry, India is in final talks to begin wheat exports to Egypt, the world's biggest consumer, and talks are also ongoing with China, Turkey, Bosnia, Sudan, Nigeria, and Iran. According to government data, wheat exports from India increased more than fourfold to approximately 6 million tonnes in the ten months through January from the previous year.
Shipping delays to the Middle East will be lengthier than from typical Black Sea exporters in Ukraine and Russia, but India is well-positioned to step in as a low-cost wheat provider.
