india prepares to plug global wheat shortage caused by russias war on ukraine - India prepares to plug global wheat shortage caused by Russia's war on Ukraine

BANGALORE – Russia and Ukraine account for 29 per cent of global wheat exports, but with the conflict between them intensifying, supplies may have to come from India, the world’s second largest wheat producer.

A large number of wheat-importing countries like the Philippines, Egypt, Morocco and Lebanon are looking to replace Russian and Ukrainian shipments, now that wheat supplies are stuck in Ukraine and sanctions make it hard for countries to buy from Russia.

The Food and Agriculture Organisation found that in 2020, Lebanon met 81 per cent of its national wheat consumption with imports from Ukraine and 15 per cent from Russia. Egypt bought 60 per cent of the wheat it consumed from Russia and 25 per cent from Ukraine. And about 66 per cent of Turkey’s wheat imports came from Russia and 10 per cent from Ukraine.

Even before the war in Ukraine, India was making focused efforts to expand its wheat exports.

Indian food secretary Sudhanshu Pandey said total wheat shipments from the country have reached a record 6.6 million tonnes since October, when the current season began, and could touch seven million tonnes by April.

India produces around 108 million tonnes of wheat annually, almost 14 per cent of the total output internationally, but much of this is consumed domestically.

The country accounts for barely 1 per cent of global wheat exports every year, with its main buyers being Bangladesh (54 per cent in volume) and Sri Lanka. But exports of wheat have been growing in the past two years, as India began selling to Yemen, Afghanistan, Indonesia and Qatar.

India’s wheat exports in April-October last year, the key post-harvest period, surged 527 per cent from the previous year to 3.2 million tonnes.

Analysts say a prolonged war could increase the dependency of wheat-importing countries on India, which can easily meet the short-term jump in demand because it has surplus stocks this year.

The country has more than 100 million tonnes of wheat in its state-held granaries, and according to the Agriculture Ministry, domestic output is expected to hit a record 316 million tonnes in 2021-22.

The ministry expects that this year, India could end up exporting a record seven to eight million tonnes.

The surge in wheat prices due to the war and export demand, however, could pose political blocks in India as local prices have increased from 21 to 24 rupees per kilogram, worrying traders who count on the crucial domestic market.

“The export demand is so huge that if we do not stop exports, prices can increase further and may also lead to shortages in future,” said Mr Anjani Agarwal, president of the Roller Flour Millers Association, who also suggested that the government release its existing stock into the market to keep prices under control.

Follow The Straits Times’ live coverage on the Ukraine crisis here.