India targeting over 30-odd Russian-Ukrainian markets to ship local wheat

Exporters say they aren't merely looking to serve a stop-gap requirement but want to become credible long-term suppliers

India is looking to replace Russia and Ukraine in around 30-odd wheat importing countries across the globe, a senior government official said.

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

That apart, another 10-15 countries have been exclusive buyers of Russian and Ukrainian wheat for the last several decades. India is keenly eyeing them as well, in order to boost its exports either through government-to-government deals or through private channels.

These countries include Egypt, Syria, Morocco, Turkey, Azerbaijan, Sudan, Italy, Yemen, Greece and all the North-East African nations, which have seldom bought Indian wheat.

“Look, our aim is not to be a stop-gap arrangement for the current crisis but to become a credible long-term supplier of good quality wheat in the markets which so far were dominated by Russian and Ukrainian wheat. We are not looking at short term gains but instead use this opportunity to build a long standing relationship with major wheat importing countries across the globe,” Madhaiyaan Angamuthu, chairman of APEDA, told Business Standard.

Globally, the top 10 leading wheat exporting countries are Egypt, Indonesia, Turkey, China, Nigeria, Italy, Algeria, Philippines, Japan, Morocco, Brazil, Bangladesh, Korea, Republic of, Netherlands and Spain.

Out of these, Indian wheat has a presence in just five of them which are Bangladesh, Indonesia, Philippines, Nigeria and Japan.

Therefore, there is significant scope for India to expand its base among major wheat importing countries now that Russia and Ukraine are expected to be out of action for the next few months.

Sources said a decision to tap almost 30-odd countries for exporting wheat was taken at the high-powered meeting of the commerce ministry called yesterday with leading wheat exporters and also officials from other line ministers. Madhya Pradesh Chief Minister Shivraj Singh Chouhan, whose state has emerged as one of the major gainers from this wheat rush also participated in the meeting.

The centre has targeted to export almost 11-12 million tonnes of wheat in FY23, which will be significantly higher than the record 7-7.25 million tonnes expected to be exported in FY22.

However, some traders said realistically, the target of 10-11 million tonnes looks plausible because one must remember that exports will slow down in the monsoon months of June to September due to logistical issues.

“Also, it would be fallacy to expect that if the Russia-Ukraine crisis gets resolved then exports won’t start from these countries,” another trader said.

Russia and Ukraine, together account for almost 25-30 per cent of the global wheat trade (see chart).

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 Russian 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 (where prices have reached even $400 per tonne for some varieties) 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.

“Such is the situation that some traders are booking cargoes at even $325 per tonne (FOB), which is lower than even corn rates, which shows the desperation to meet the demand,” another trader.

The spike in global rates and the subsequent scramble among private players to purchase Indian wheat to meet global demand has pushed up domestic prices to almost Rs 200-300 per quintal more than the 2022-23 MSP of Rs 2015 per quintal.

The interest shown by private buyers and exporters towards Indian wheat has also meant that the Centre might look at buying almost 9-10 million tonnes of wheat for its central pool than the targeted 44.4 million tonnes, which could help it in saving some of the food subsidy Budgeted for FY23.

India is expected to harvest a record over 111 million tonnes of wheat in 2022-23 (April-March), which is almost 2 million tonnes more than this year.

Top 10 wheat exporting nations and their share in world wheat trade as on 2020

Nations	Share in %
Russia	17.62
USA	14.07
Canada	14.02
France	10.1
Ukraine	8
Australia	6.04
Argentina	4.71
Germany	4.68
Kazakhstan	2.53
Poland	2.53

NOTE: The top 10 nations control 84.09 per cent of the world wheat market
Source: APEDA and Private Traders