Russia’s invasion of Ukraine has thrown the global commodity markets into disarray. Crude oil, natural gas, coal, wheat, corn, aluminium, steel, copper and palladium are some of the commodities that have seen a sharp rise in prices.
The war has also pushed global wheat prices to a 14-year-high, since Russia and Ukraine together account for 30% of global wheat exports.
India is the second biggest wheat producer in the world after China, with a share of 13.5% of the world’s total production. However, India’s share in global wheat exports is just 0.54%.
Wheat stocks in India’s central pool are pegged at around 26 million tonnes, that’s 248% more than the quantity required to be stored, as on April 1 each year.
Disruption in global wheat supply is already being felt, as Ukrainian ports remain closed and Western sanctions turn buyers away from Russian wheat.
Egypt, Indonesia, Algeria, Brazil, Bangladesh and Turkey are among the world’s biggest wheat importers.
Just three countries, Egypt, Turkey and Bangladesh, bought more than half of Russia’s wheat in 2019.
Russia and Ukraine cover more than 70% of Egypt’s imported wheat demand.
The ongoing geopolitical crisis, however, has thrown up an opportunity for Indian exporters and farmers.
Last week, Food Secretary Sudhanshu Pandey said that India’s wheat exports have picked up, adding that a rally in global prices gives India an opportunity to gain market share.
India’s new wheat crop is also slated to hit the market from March 15. Other global players will enter the market only after the end of the summer in respective geographies.
Therefore, Indian traders will look to make the most of the next few months when the global supply will be limited.
Indian farmers are also reaping the benefits, as the new crop that has started arriving is being sold at 15% higher than the MSP rate in several mandis of Madhya Pradesh and Gujarat.
Bangladesh, Nepal, United Arab Emirates, Sri Lanka and Yemen are the top buyers of Indian wheat. Other importers who were dependent on Russia and Ukraine could also turn to India. Lebanon is already in talks with India to import the grain.
India is set to export a record seven million tonnes of wheat this fiscal, breaching the record of 6.5 million tonnes set in 2012-13.
If global markets remain choppy and restrictions are imposed on exports, India’s outbound shipment of wheat can touch 10 million tonnes in FY23.
Export demand for Indian corn has also spiked as buyers look for alternatives to Ukraine, which is a leading producer and exporter of corn.
Similarly, Indian metals companies are likely to benefit in the short term due to escalating geopolitical tensions. Russia is a top steel and aluminium exporter.
 "How Indian trade is filling the void left by Russia-Ukraine?")
