Wholesale wheat prices fell 19% in Madhya Pradesh and by 6% in Rajasthan after the government decided to control wheat exports over the weekend. Uttar Pradesh was the sole exception among major wheat producing states where prices have marginally increased.
Industry sources said there was a minor correction in prices after the Centre eased the ban on wheat exports by allowing consignments handed over for inspection or registered with the customs department by May 13 to go through. The strict controls, which are effective May 13, are meant to cool down domestic prices with an exception made for orders that had been booked earlier.
With trucks piling up at Kandla port, the commerce ministry said, “Wherever wheat consignments have been handed over to customs for examination and have been registered into their systems on or prior to May 13, 2022, such consignments would be allowed to be exported.” The government also allowed the export of an Egypt-bound consignment of 61,500 tonnes that was already being loaded at Kandla. Brokerage firm Barclays said that the ban on exports is only “marginally positive” for the domestic inflation outlook.
Soon after the government clarification, global prices dropped 2.3% before rising around 3.3% by late evening. Prices in the international market have risen following curbs announced by India.
Market data, however, pointed to softening in local mandis. The maximum price in MP dropped to Rs 2,015 a quintal compared to Rs 2,500 on May 10. Similarly, in Rajasthan it fell to Rs 2,600 a quintal compared to Rs 2,767 a week ago. Another set of data from the Agmarknet run by the government showed that the wholesale wheat prices in some mandis in Gujarat fell by Rs 200 per quintal post the export curb.
“There has been some correction in wholesale prices after the government’s clarification came for exports. We have to wait and watch for the next few days,” a trader in UP said.
