How the wheat export story changed in two months-
✅Last week government banned the export of wheat with some minor exceptions for those who have irrevocable letters of credit or where the governments of importing countries request the Indian government for food security purposes.
● Background:
✅Russia and Ukraine are two large exporters of wheat but they are in the middle of a war.
✅India had opportunity to promote export of wheat.
✅Efforts to increase wheat exports continued.
✅Centre decided to send trade delegations to Morocco, Tunisia, Indonesia, Philippines, Thailand, Vietnam, Turkey, Algeria and Lebanon to explore possibilities of boosting wheat exports.
✅Food security campaigners insisted on a cautious approach from the start.
✅Reasons:
✅Ensuring stability of prices in India
✅Availability of grain for internal consumption
✅Increase in exports should not be at the cost of domestic consumption, especially with a recent expansion of Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) program.
● Why were wheat exports banned?
✅Recently, the government revised its wheat production estimates from 111.32 million tonnes (MT) to 105 MT for the crop year ending June.
✅Decrease in production estimates and a considerable fall in wheat procurement raised concerns that domestic consumption may get impacted.
✅Local prices started to rise.
✅In March, wholesale inflation of wheat crossed the 14% mark.
✅Both these factors forced government to ban wheat exports .
✅It relaxed its ban order by allowing consignments that were registered in Customs Department’s systems and handed over for examination on or prior to May 13.
✅They have also allowed a consignment headed for Egypt.
What led to the decrease in production?
✅Extreme temperatures: Reason behind sudden turnaround of the government.
✅Punjab: between April 8 and 14, maximum temperature was over 6°C higher than the usual, compared to the long period average.
✅Extreme heat led to a marked decrease in wheat yields across north India.
✅Punjab: wheat productivity was below 18 quintals per acre this year, down from the average yield of 19.7 quintals per acre last year.
✅Wheat arrivals in Punjab's mandis were 20% lower in the first twenty days of 2022 season compared to the same period in 2021.
✅In the first twenty days, 73 lakh metric tonnes of wheat had reached the mandis in 2022, compared to the 92.4 lakh recorded in 2021.
● Prelims take away:
✅Wheat production - Required climate, trade and marketing
✅Heat waves
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