Union Cabinet imposes curbs on wheat flour export

The Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, approved the proposal for amendment of the policy of exemption for wheat or meslin flour from export restrictions. The amendment would allow the Centre to check exports of wheat flour depending on market conditions.

The Directorate General of Foreign Trade (DGFT) will issue a notification to this effect, as per a government statement on Cabinet decisions.

Russia and Ukraine are major exporters of wheat accounting for around a fourth of the global wheat trade. The war, however, led to trade disruptions and thus supply, increasing demand for Indian wheat. As a result, price of wheat in domestic market surged.

To ensure food security of 1.4 billion people of the country, a decision was taken to prohibit export of wheat in May. But, this caused a jump in export demand for wheat flour. Wheat flour shipments from India jumped 200% year-on-year during April-July 2022. The increased demand for wheat flour in international markets led to a significant price rise of wheat flour in the domestic market.

“Earlier, there was a policy not to prohibit or put any restrictions on the export of Wheat flour. Therefore, a partial modification of the policy has now been done by withdrawing the exemption from ban/ restrictions on export for Wheat Flour in order to ensure food security and put a check on mounting prices of Wheat flour in the country,” as per the official statement.

The Union government in had July made it mandatory for exporters of wheat flour and related products as semolina, wholemeal atta and ‘resultant atta’ to seek approval of an inter-ministerial committee (IMC) for exports.

Mint had reported that atta exports during all of FY22 stood at 500,000 tonne. However, nearly 100,000 tonne of atta has been shipped out every month since the ban on wheat exports on 13 May.

Earlier this year, trade minister Piyush Goyal had asked state governments to increase the sowing area for paddy and wheat. The World Bank has projected that agricultural commodity prices will remain well above their five-year average this fiscal.

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