Within hours of curbs, domestic traders claim wheat prices are softening – Times of India

NEW DELHI: The Centre on Saturday put several measures including strict controls on wheat exports. However, food secretary Sudhanshu Pandey said, “Global demand was rising and different countries were putting restrictions. Sentiments were driving prices. We are confident now the sentiments will push down the prices.”
Within hours of the measures being announced, domestic traders claimed that prices had started softening. Prices dropped by Rs 100-150 a quintal across several states, according to the Roller Flour Millers’ Federation of India. “We are directing the wheat trade in a certain direction. We do not want the wheat to go in an unregulated manner to places where it might get just hoarded or where it may not be used to the purpose which we are hoping it would be used for,” commerce secretary BVR Subrahmanyam said, while explaining the rationale for putting exports under the “prohibited” category.
On Friday, TOI was the first to report about the proposed export curbs following discussions in a ministerial panel headed by home minister Amit Shah.
This year, with private traders entering the market in a big way, government procurement for the food security programme is expected to be around 57% lower at 185 lakh tonnes, the lowest in at least 13 years. Higher exports, identified as a major focus just a month ago, resulted in lower procurement by the government, along with crop damage due to the early onset of summer adding to the supply constraints globally.
Pandey, however, sought to assure that there were adequate stocks to meet domestic requirements. Against the buffer requirement of 75 lakh tonnes, stocks at the start of April were estimated at 190 lakh tonnes.
Along with export curbs, the government introduced other steps, further reducing wheat allocation to states under the National Food Security Act (NFSA). Earlier, it had reduced the wheat allocation for 11 states by 60% under PM Garib Kalyan Yojna, which is operational till September. On Friday, the food ministry again revised the allocation of wheat for 10 states under the food security scheme, NFSA. This norm will be applicable till March, 2023. As per the revised norms, the total allocation of wheat to these states under NFSA will be 9.4 lakh tonnes per month till March, compared to earlier allocation of 15.4 lakh tonnes, a drop of nearly 40%. This will save around 110 lakh tonnes of additional wheat that can be made available with the government in its stocks to meet any exigencies.
While the government maintained it had not banned export of wheat, a notification by the directorate general of foreign trade said that shipments out of the country will be permitted on a government-to-government basis to vulnerable and neighbouring countries. In addition, exports for which irrevocable letters of credit have been issued, will be permitted.
Officials clarified this will allow exports to neighbouring countries such as Bangladesh and Nepal, but consignments to China and Pakistan may not be permitted. Amid reports that China was hoarding wheat and other foodgrains due to a spurt in global prices, Subrahmanyam refused to comment on the issue.