India Resumes Wheat Exports After Four-Year Hiatus Amid High Prices
India resumes wheat exports after 4 years, but high prices may curb demand
Business Standard
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India has restarted wheat exports for the first time in four years, shipping 22,000 metric tons to the United Arab Emirates from Kandla port. Despite a strong harvest, rising domestic prices and competition from cheaper supplies in Australia and the Black Sea may limit demand for Indian wheat in global markets.
- 01India resumes wheat exports after a four-year ban due to favorable harvest conditions.
- 02The first shipment of 22,000 metric tons is headed to the United Arab Emirates at $275 per ton.
- 03High domestic prices make Indian wheat more expensive than competitors from Australia and the Black Sea.
- 04Only buyers with immediate needs are likely to purchase Indian wheat due to its higher cost.
- 05The ongoing Iran conflict has increased freight costs, influencing some buyers to source from India.
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After a four-year export ban, India has initiated wheat shipments, with 22,000 metric tons being sent to the United Arab Emirates from the Kandla port. This decision follows a robust harvest that alleviated previous concerns about domestic shortages and allowed the government to lift restrictions. Prime Minister Narendra Modi's administration has authorized the export of 2.5 million tons of wheat earlier this year, with an additional 2.5 million tons approved recently. However, rising domestic prices, currently at $275 per ton, have made Indian wheat less competitive compared to Australian and Black Sea supplies, which are priced between $290-$300 per ton. As a result, only importers facing urgent supply gaps are expected to turn to Indian wheat, limiting the potential for a significant increase in exports despite the resumption.
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The resumption of wheat exports could provide a temporary boost to Indian farmers and traders, but high domestic prices may limit broader market opportunities.
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