Egypt approves India as wheat supplier; to import about one million tonnes

240,000 tonnes to be shipped in April itself; export approved after rigorous process of field visits and checks in quarantine facilities

In a big breakthrough, Egypt, the world’s largest importer of Russian and Ukrainian wheat, has approved India as one of its suppliers, Commerce Minister Piyush Goyal said. Egypt is likely to lift about one million tonnes of wheat from India, of which 240,000 tonnes will be shipped in April itself.

However, this is a very small proportion of the total annual wheat purchases by the African country, which buys 11-12 million tonnes of wheat from Russia, Ukraine and other countries in a year.

Sources said that export was approved after a rigorous process of field visits and checks in quarantine facilities in India by Egyptian authorities following complaints of Indian wheat containing 'karnal bunt' disease.

The teams visited wheat fields in Madhya Pradesh, UP and Punjab to check for themselves the quality of wheat produced in India. India aims to export 10-11 million tonnes of wheat in FY23 due to the surge in global demand following the Russia-Ukraine crisis.

Egypt imported wheat worth about USD 1.8 billion from Russia and USD 610.8 million from Ukraine in 2020.

“Indian farmers are feeding the world. Egypt approves India as a wheat supplier. Modi Govt. steps in as the world looks for reliable alternate sources for steady food supply. Our farmers have ensured our granaries overflow and we are ready to serve the world,” Goyal said in a tweet.

Later in the evening in a press conference, in Mumbai, Goyal said that Egypt has allowed the imports following personal intervention of top officials and India wants to become a regular supplier of good quality wheat to the African nation.

"We are hoping to achieve a wheat export target of at least 10 million tonnes in Fy-23 which  can even go up to 15 million tonnes if conditions remain favourable," the minister said. 

He said in the first week of April 2022, total merchandise exports have crossed $9 billion which is very encouraging because April is usually considered a slow month for exports and in March 2022 we crossed $42 billion  of exports.
 

India's wheat exports rose to $1.74 billion in April-January 2021-22 as against $340.17 million in the same period last year.

In 2019-20, wheat exports were worth USD 61.84 million, which rose to USD 549.67 million in 2020-21.

India's wheat exports are mainly to neighbouring countries with Bangladesh having the largest share of more than 54 per cent in both volume and value terms in 2020-21.

It has entered new wheat markets such as Yemen, Afghanistan, Qatar and Indonesia. In all, the country is targeting to replace Russia and Ukraine in 30-odd wheat importing countries across the globe, senior government officials said.

Of these 30 countries, 10-15 are existing customers of Indian wheat along with that of Russia and Ukraine, but India’s share is less in the total volume of imports.

That apart, there is another lot of 10-15 countries that have been exclusive buyers of Russian and Ukrainian wheat since the last several decades, which includes Egypt.

The top ten countries importing Indian wheat in 2020-21 were Bangladesh, Nepal, the United Arab Emirates, Sri Lanka, Yemen, Afghanistan, Qatar, Indonesia, Oman and Malaysia. India accounts for less than 1 per cent in the world's wheat export. However, its share has increased from 0.14 per cent in 2016 to 0.54 per cent in 2020.

India is the second largest producer of wheat with a share of around 14.14 per cent in the world's total production in 2020. India produces around 107.59 million tonnes of wheat annually while a major chunk of it goes towards domestic consumption, which is estimated to be around 98 million tonnes.

This leaves around 10-12 million tonnes in surplus for exports. Major wheat growing states in India are Uttar Pradesh, Punjab, Haryana, Madhya Pradesh, Rajasthan, Bihar and Gujarat.

Prices of Indian Indian wheat prices in the world markets had shot up to around $360 per tonne (FOB) a few days back in the aftermath of the crisis cooling down a bit to around $330-$340 per tonne (FOB) in the last few days.

The current price of Indian wheat is still the cheapest among all global competitors and the absence of Ukraine and Russia from the world markets for the next few months will give Indian traders a golden chance to ship record quantities.

Because of the jump in exports, wheat procurement in Fy-23 is expected to be much less than the targeted 44.4 million tonnes as farmers are preferring to sell wheat to private traders at rates higher than the Minimum Support Price (MSP) of Rs 2015 per quintal.

Till April 11, 2022, wheat procurement in Central pool was almost 30 per cent less than last year. But, it is expected to pick up pace in the next few days. However, traders said that total procurement this year is expected to be around 30-32 million tonnes, much less than the targeted 44.4 million tonnes.