Indian traders are in talks to export over 150,000 mt of wheat to Bangladesh and around 50,000 mt to Nepal over the next few months, trade sources told S&P Global Platts May 13.
However, the average export prices for wheat are seen rising 10% from last year as the domestic prices firmed up amid tightening of supplies following government procurement, traders added.
Along with the likely rise in prices, the exports are also seen declining in 2021-22 marketing year.
For the 2021-22 marketing year, the US Department of Agriculture has estimated India’s wheat exports at 2.2 million mt against 2.3 million mt seen in the previous year.
India’s wheat marketing year runs from April through March.
India, the world’s second-largest wheat producer, is in a position to export significant quantities after several years at a time when global inventories are at two-year lows.
Exports became viable for India as Russian supplies were limited following the announcement of export quota and floating tax, an Indian exporter said. The floating tax on wheat and other grains will kick in from June 2.
“The exports are seen falling in the current marketing year, as the prices may rise with supplies tightening with the government purchases are rising sharply,” a Delhi-based trader said.
Spike in government purchases may limit supply
So far, the Food Corp. of India procured around 34.8 million mt of wheat, nearly 34% higher over the year, data showed.
The FCI is the government’s agency for procurement, disbursal and maintaining government inventories of food grains.
“The export prices of the grain are expected to increase as the government procurement in India is limiting domestic supplies in the country,” a Bangalore-based exporter said.
In the current marketing year, FCI has so far procured nearly 32% of India’s overall output, data showed. India is expected to harvest 109.2 million mt of wheat and the government has pegged overall wheat procurement at 42.7 million mt.
“With the procurement increasing sharply this year, the average export prices from India are seen going up by nearly 10%,” an official with a multinational firm said.