- The UN’s World Food Programme (WFP) has said that it is in discussions with India on procurement of wheat as countries face food security challenges amid the Ukraine war.
- The World Food Programme launched the 2022 Global Report on Food Crises
- It stated that Ukraine is facing a three-dimensional crisis of food, energy and finance with devastating impacts on the world’s most vulnerable people, countries and economies.
- The report said that globally, levels of hunger remained alarmingly high.
- The report warned that the outlook for global acute food insecurity in 2022 is expected to deteriorate further relative to 2021.
- Bangladesh continues to grapple with the economic recovery from two years of COVID-19. It is one of the world’s biggest wheat importers buying chiefly from India, Canada, the Russian Federation and Ukraine.
- The Global Report on Food Crises added Pakistan to the list of the ten largest food crises replacing Zimbabwe.
- Russia’s invasion of Ukraine and the subsequent western sanctions on Russia have affected wheat exports from the Black Sea region and impacted food security in several countries, especially in Africa and West Asia.
- Russia and Ukraine together account for about 30 per cent of the total global exports of wheat.
- In 2021, almost 70% of the total numbers of people in crisis or worse or equivalent were found in ten countries/territories
- The Democratic Republic of the Congo, Afghanistan, Ethiopia, Yemen, northern Nigeria, the Syrian Arab Republic, Sudan, South Sudan, Pakistan and Haiti.
- In seven of these, conflict/insecurity was the primary driver of acute food insecurity.
What is the status of India’s wheat exports?
- Globally, Russia is the market leader for wheat exports (almost 15% share) and Ukraine is also a major producer.
- Exports from these two countries have been hit by the war and sanctions.
- India expects to produce 112 million tonnes of wheat in the current season.
- India began sending shipments of wheat to Afghanistan. India has committed to supplying 50,000 tonnes of wheat to Afghanistan.
- The government requires 24-26 million tonnes a year for its food security programmes.
- With surplus wheat production, opportunities have opened up for exports. Wheat exports in the 2021-2022 financial year were estimated at 7.85 million tonnes, a quadrupling from 2.1 million tonnes in the previous year.
Why is demand for India’s wheat expected to rise ?
- The disruption to global wheat supplies in turn has thrown open opportunities that India’s grain exporters are eyeing, especially given the domestic surplus availability of the cereal.
- More countries are turning to India because of the competitive price, acceptable quality, availability of surplus wheat and geopolitical reasons.
- While the existing importers are buying more, new markets have emerged for Indian wheat. Exports this fiscal year are expected to be almost 10 million tonnes worth $3 billion.
Which new markets are expected to buy from India?
- The different grades of wheat produced in India are of the milling quality. So, apart from Egypt and Jordan, countries in East Africa are also likely to source the foodgrain from India.
- India has sent out dossiers to over 20 countries and talks are on at different levels with all these countries.
- The aim is to reach early resolution on the Pest Risk Analysis by each of these countries so that exports can take off.
- The Agricultural and Processed Food Products Export Development Authority (APEDA) and Ministry of Agriculture are also sending delegations to several countries to resolve market issues, if any, for exploring possibilities of boosting wheat exports from India.
What is being done to facilitate exports?
- The Commerce Ministry has put in place an internal mechanism to facilitate it and get the paperwork ready for the related sanitary and phytosanitary applications to help facilitate shipments.
- Wheat is going in full vessel loads and needs to be transported to the ports from the growing areas.
- The railways are providing rakes on priority to move the wheat.
- The railways, ports, and testing laboratories are all geared up to meet the requirements.
What norms are buyer countries using to approve Indian wheat?
- Countries that have not previously imported wheat from India insist on the completion of the Pest Risk Analysis to provide market access.
- There are also other different standards that the buyers share with their sellers here.
- While, at present, Indian suppliers are able to meet these criteria, Indian authorities are working closely to step in and negotiate resolution if any “unreasonable” standards are stipulated.
What is the future outlook?
- The government is optimistic about the long-term export opportunities not only for wheat, but for all cereals including millets and superfoods.
- Trade sources say if Indian wheat prices remain competitive and geopolitical and weather conditions stay favourable, the scope is good for wheat exports.
- India has won the confidence of markets such as Sri Lanka and Bangladesh.
- It needs to establish itself in the new markets too and the government should facilitate it.
- It is the main cereal crop in India.
- Indian wheat is largely a soft/medium hard, medium protein, white bread wheat, somewhat similar to U.S. hard white wheat.
- Wheat grown in central and western India is typically hard, with high protein and high gluten content.
- It is Rabi Crop which is sown in October-December and harvested during April-June.
- Temperature: Between 23±3°C and for good tillering temperature should range between 16-20°C.
- The best wheat is produced in areas favoured with cool, moist weather during the major portion of the growing period followed by dry, warm weather to enable the grain to ripen properly.
- Rainfall: 50 cm to 100 cm rainfall.
- Soil Type: Soils with a clay loam or loam texture, good structure and moderate water holding capacity are ideal for wheat cultivation.
- Wheat growing states in India: Uttar Pradesh, Punjab, Haryana, Madhya Pradesh, Rajasthan, Bihar and Gujarat.
FAO Food Price Index
- The FAO Food Price Index (FFPI) is a measure of the monthly change in international prices of a basket of food commodities.
- It consists of the average of five commodity group price indices weighted by the average export shares of each of the groups over 2014-2016.