New Delhi, March 9: Wheat exports from the country have increased after the political crisis in Ukraine. Prices, too, have shot up — the grain is now fetching $275 a tonne in the international market even as earlier efforts to sell it at lower prices had failed.
India is saddled with a huge stock of 24 million tonnes of wheat against the domestic requirement of 11.2 million tonnes. It had offered around 2 million tonnes for export in August to empty its overflowing granaries and earn foreign exchange. However, it could find few buyers even at $260 a tonne.
With the conflict deepening in Ukraine, one of the world’s biggest exporters of wheat, global prices have started moving up.
The east European nation exports around 18 million tonnes annually.
Global commodity giants feel Ukraine’s sales will fall drastically with trade and commerce being held up by the ongoing revolution followed by a dispute over its coastal territories with Russia.
The rise in global prices because of dwindling supplies prompted Anglo-Swiss commodity giant Glencore to scoop up around 160,000 tonnes from the Food Corporation of India earlier this week.
Prices of wheat in Ukraine are rising as the farmers are hoarding the grain as a hedge against the nation’s depreciating currency and political risks, according to reports of the US Grains Council.
Analysts say exports from Ukrainian city Odessa and other Black Sea ports continue, but shippers are concerned about the ports being blocked and the disruption in transport from the hinterland.
Ukraine can still ship around 2.5 million tonnes of wheat to meet its 2013-14 export targets, according to commodity analysts. A huge amount of the grain is lying idle in the country’s silos, giving nightmares to commodity dealers.
For farm season 2013-14 ending June, India is expected to produce 100 million tonnes of wheat compared with 94.88 million tonnes in the previous year. Despite efforts to make space for the new crop through exports and sales to millers, only a little over 3 million tonnes have been sold in the foreign markets so far. The prices in the current farm season had been lower than 2012-13 because of a glut in Indian and US production.
However, with prices firming up because of the Ukraine crisis, top agriculture ministry officials expect sales to reach the targeted 4 million tonnes at rates as high as $300 a tonne.
South Korea, Ethiopia, Bangladesh and Asean members Thailand and Indonesia are among the top buyers of Indian wheat.