India’s exports of agricultural produce crossed ₹ 4 lakh crore. India is exporting wheat in a big way as global demand has increased.
One feature of this wheat export surge from India is the establishment of the brand MP of wheat at the international level. ‘Brand MP of wheat’ is already well established in the domestic market, but now it is almost global. MP is the second largest wheat producing state in the country with a production of about 360 metric tonnes.
Sharbati and other wheat varieties of Madhya Pradesh have a different identity. The Madhya Pradesh government has made it mandatory for exporters to mention ‘MP Sharbati Wheat’ in their invoice, instead of just writing wheat. The demand for high quality wheat varieties like Sharbati, Kathia (durum) and Lokwan grown in Madhya Pradesh has shot up in the international market.
The MP government has an additional quantity of 3.75 million tonnes in 19 districts of the state, which can be made available for exports. Besides the quality of MP wheat, there are incentives for exporters also. For example, subsidies for freight rates have been increased. Then there are fiscal incentives from the state government to exporters who can now get a licence by paying ₹ 1,000 instead of ₹ 3 lakh required earlier. Furthermore, the Madhya Pradesh government is trying to enter into long-term trade contracts with different countries through the Ministry of External Affairs and APEDA. Similarly, the Madhya Pradesh government has waived mandi fee and other levies aggregating 3.5% on grain purchases in the state in order to give wheat exports a push.
On the other hand, the Agricultural and Processed Food Products Development Authority (APEDA) is providing support to exporters in terms of freight registration, conducting meetings with importing countries and coordinating with various ministries.
Madhya Pradesh has emerged as the second-biggest producer of wheat in the country. In fact, the bulk of India’s wheat exports are currently sourced from Madhya Pradesh because of its relative proximity to the Kandla and Mundra ports. India has achieved its target of exporting 7 million tonnes (MT) of wheat in FY22 on March 21 itself and a record 7.85 million tonnes wheat was exported in FY22 – up 275% from the previous year. The government is aiming at wheat exports of around 11 MT in FY23 and the market expects it to touch around 12-15 million tonnes.
Further streamlining is on. The union commerce ministry has set up a task force on wheat exports with representatives from various ministries, including commerce, shipping and railways, and exporters under the aegis of APEDA. The Centre is sending trade delegations to Morocco, Tunisia, Indonesia, Philippines, Thailand, Vietnam, Turkey, Algeria and Lebanon for exploring possibilities of boosting wheat exports from India. India has set a target of a record 10 million tonnes of wheat exports in the 2022-23. As per the targets, wheat exports in FY23 could potentially be 2.5 times the current year’s all-time high in value terms and close to nine times the shipments made in FY21.
1.76 lakh tonnes of wheat were exported from Madhya Pradesh during the last marketing season, whereas about 2.5 lakh tonnes of wheat has been exported in the last one month of this marketing season alone. Two more months are still left for this marketing season to end. Traders were buying Sharbati and Kathia (durum) wheat from farmers in Madhya Pradesh and mainly exporting to Bangladesh, Vietnam, the Philippines and the United Arab Emirates (UAE). India traditionally exports wheat to South Asian neighbours and northern Africa. But, this time around, the importers from Africa are also evincing keen interest in MP’s wheat. In the coming days, wheat from Madhya Pradesh might be exported to Egypt, Zimbabwe, Mozambique and Tanzania also.
In fact, many countries are looking at India for the supply of wheat. For the first time, top global wheat importer Egypt has agreed to purchase the grain from India, which will help India to establish the reputation as a top tier supplier. Egyptian authorities have put India as one of the origins for wheat, after a visiting delegation from Egypt toured Madhya Pradesh, Punjab and Maharashtra to ascertain quality, storage and other export parameters. Egypt imported 6.1 MT of wheat in 2021 and India was not part of the list of accredited countries which can export wheat to Egypt. APEDA has communicated to wheat exporters to register with Egypt’s public procurement agency – General Authority of Supplies and Commodities, which manages wheat and sugar imports to Egypt. Similarly, for the first time, electronic mandi AgriBazaar has received an order for execution of 50,000 metric tonnes of wheat from, understood to be from Turkey, at an approximate value of ₹125 crore. Other countries too have approached India for wheat imports, including Israel, Oman, Nigeria and South Africa.
What Made It Possible!
Sure, there is a confluence of high international prices, supply shortfall due to Ukraine-driven disruptions, crop cuts in Canada and quality downgrades in Australia. On the other hand, there have been consecutive record crops, and improved internal logistics, which have made shipments from India attractive.
But that is not all. India’s exports have also been helped by a sharp jump in crop quality. This quality climb was achieved through rapid and widespread adoption of higher quality seeds. The top 10 wheat seed varieties accounted for more than 70% of the roughly 31.5 million hectares planted with wheat last season. Indian wheat with 12% to 13% protein is pretty common now and that compares favourably with APW’s (Australia Premium White) 11.5% to 12% protein. Better seeds have transformed India’s wheat market as abundant in superior grades such as Durum, Lokwan and Sharbati used in pizza, pasta and premium bakery products. Then a flurry of export deals signed in February and March were already in place. In the last 6 months, special varieties of wheat, Lokvan, Sharbati, Malwa Shakti, Sujata, were purchased from the farmers in the mandis of Madhya Pradesh for the international wheat markets.
Still, India has a bumper stock of wheat. This is even after providing huge quantities of food grains to the poor amid the pandemic under the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) scheme. Another 24.4 million tonnes of free food grains are to be extended under PMGKAY. Still, India is export ready.