Indonesia, Bangladesh top gainers: India clears wheat exports of 5 lakh tonnes after ban

Indonesia, Bangladesh top gainers: India clears wheat exports of 5 lakh tonnes after ban

7 Jun    Finance News

India shipped out as much as 11.3 lakh tonnes of wheat in May, of which 4-5 lakh tonnes were despatched after a ban on the grain’s exports was imposed on May 13, sources told FE. The total shipment of the grain in May was close to 3 times of the level a year before.

Indonesia and Bangladesh have emerged as the biggest beneficiaries of the post-ban despatches, with each importing at least 1 lakh tonnes of Indian wheat, a trading source said. On top of these, the directorate general of foreign trade (DGFT) had earlier allowed exports of 61,500 tonnes to Egypt. These supplies also include aid.

Importantly, 27.4 lakh tonnes of wheat (worth $902 million) have been exported until June 2 this fiscal, about four times from a year before. In FY22, the country had exported a record 72 lakh tonnes of wheat worth $2.12 billion.

While prohibiting wheat exports last month to curb domestic price rise, the government stated the shipments that were already backed by letters of credit (LCs) issued before the ban would be allowed. New Delhi also made it amply clear that it would cater for the genuine need of neighbouring countries and food-deficit nations through government-to-government deals and honour supply commitments already made.

However, suspecting a flood of fake and illegal LCs, the directorate general of foreign trade (DGFT) last week warned wheat exporters that it would examine cases for referral to the Central Bureau of Investigation and the Economic Offence Wing if they were found to be using back-dated LCs to get permits for shipping out the grain.

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Apart from Indonesia and Bangladesh, the UAE, South Korea, Oman and Yemen are among a growing list of countries that have approached India for wheat under bilateral arrangements between governments after May 13. The government is considering their requests.

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