Export demand for Indian wheat, corn and spices has shot up after Russia launched a military operation against Ukraine, forcing the international trade of agricultural commodities to shift sourcing to India since supplies from the two nations have come to a grinding halt.
“The prices of wheat at the Kandla port have increased from ₹2,200 per quintal to ₹2,350-2,400 per quintal in the last four days. With the FCI (Food Corporation of India) declaring that its upcoming tender this week will be the last one in March, we think that the prices of wheat and wheat products may increase further in the next fortnight,” said Sanjay Puri, former president of the Roller Flour Millers Association of India. “The next crop will be harvested only after Baisakhi (April 13).”
Most of the wheat stock in India is held by the government agency FCI, which is not exporting the commodity. Wheat traders want the FCI to release more wheat into the market, which will help keep domestic prices under control, reduce excess stocks and also meet the export demand. However, the processing industry is worried. “We will be requesting the government to immediately stop export of wheat from the country as the local prices have jumped from ₹21 per kg before the outbreak of the war to ₹24 per kg today (Tuesday). The export demand is so huge that if we do not stop exports, then the prices can increase further and may also lead to shortages in future,” said Anjani Agarwal, president, Roller Flour Millers Association.
Apart from wheat, demand for Indian corn has increased as buyers from India’s neighbourhood shifted from Ukraine to India.
“Ukraine used to be a big exporter of non-GMO corn. Due to tensions in the Black Sea region and the high freight rates, now the demand for maize from South Asia will shift to India as no other origin can feed this demand,” said the head of an international trade consulting body, who did not wish to be identified. “India’s corn exports have been increasing for the past two years as supplies from Myanmar dwindled after the military coup in that country.”
Growing export of Indian corn has led to an increase in prices. Balram Yadav, managing director, Godrej Agrovet, said, “The farm gate price of corn has increased from ₹19.50-20 per kg to ₹22 per kg. It may hover there or come down slightly by May.”
Prices of spices have also increased due to local shortages and strong global demand. “Ukraine is one of the major exporters of coriander seeds. Coriander prices have increased about 30% during the past few months as the crop is smaller,” said Ashwin Nayak, founding chairman, Federation of Indian Spice Stakeholders. “Now, we expect increased export demand for Indian coriander as supplies from the Black Sea region will be restricted.”
Jeera prices have jumped 25-30% in four months due to reduced production and geopolitical factors. India is now the only prominent jeera supplier as supplies from countries such as Afghanistan, Turkey and Syria have been disturbed due to geopolitical reasons.
Strong export demand for cotton, yarn, fabric, and readymade garments has made the local spinning mills consume more cotton. Millers said that an unprecedented increase of about 65% in domestic cotton prices from about ₹135 per kg in February 2021 to ₹219 per kg in February 2022 is posing a challenge to exporters in meeting their export commitments. To meet the strong export demand, the South Indian Mills Association has asked the government to allow import of 4 million bales of cotton. The poultry industry is gearing up to ensure that prices of soybean, which is used as chicken feed, remain under control.