Workers carry sacks of wheat for sifting at a grain mill on the outskirts of Ahmedabad, India, May 16, 2022.
| Photo Credit: Reuters

The UAE has ordered a suspension of exports and re-exports of wheat and wheat flour originating from India for four months, the Gulf nation’s ministry of economy said on Wednesday.

The move follows India banning the export of wheat last month to check the surge in local prices. With this, Indian wheat cannot be rooted to third countries via the UAE.

The ban, which the ministry called as ‘moratorium’, has been imposed effective from May 13 “in view of the international developments that have affected trade flows”.

India had on May 14 banned wheat exports except for those backed by already issued letters of credit (LCs) and to countries seeking to ensure food security. Since then, it has allowed shipments of 469,202 tonnes of wheat.

The United Arab Emirates Ministry of Economy said the ban “applies to all wheat varieties namely hard, ordinary and soft wheat and wheat flour.” In a statement said a moratorium has been imposed “on the export and re-export of wheat and wheat flour originating from the Republic of India, including free zones, for a period of four months starting from May 13, 2022.”

This “decision comes in view of the international developments that have affected trade flows, and in appreciation of the solid and strategic relations that bind the UAE and India, especially after the signing of the Comprehensive Economic Partnership Agreement between the two countries and the Indian government’s approval to export wheat to the UAE for domestic consumption.”

India and UAE had in February signed the Comprehensive Economic Partnership Trade Agreement (CEPA) to cut all tariffs on each other’s goods and aims to increase their annual trade to USD 100 billion within five years.

The pact took effect on May 1.

“However, companies wishing to export/re-export wheat and wheat flour varieties of Indian origin, which were imported into the country before May 13, 2022, must submit a request to the Ministry to obtain permission to export outside of the UAE,” the Ministry said.

They must submit all documents and files that help verify the data regarding the shipment in terms of its origin, date of transaction, and any other documents that the Ministry may require.

The Ministry also indicated that in the case of wheat and wheat flour products of non-Indian origin, companies wishing to export/re-export it may do so after applying to the Ministry for export permission outside the country.

This application must also be supported by all documents and files that help verify the origin of the shipment to be exported/re-exported.

The Ministry noted that the export permit issued to companies is valid for 30 days from the date of issuance and must be submitted to the relevant customs department in order to complete the procedures for exporting the shipment out of the UAE.

Supply trucks loaded with wheat wait for unloading at a port in Kandla, in the western state of Gujarat, India, May 17, 2022. REUTERS/Stringer NO RESALES. NO ARCHIVES.
| Photo Credit: Reuters

The price of wheat has jumped in the international markets after India announced a ban on the export of the staple cereal and due to the reduced production prospects in Ukraine following the Russian invasion, the UN food agency has said.

The Food and Agriculture Organisation (FAO) Price Index averaged 157.4 points in May 2022, down 0.6% from April.

The index, which tracks monthly changes in the international prices of a basket of commonly-traded food commodities, however, remained 22.8% higher than in May 2021.

The FAO Cereal Price Index averaged 173.4 points in May, up 3.7 points (2.2%) from April and as much as 39.7 points (29.7%) above its May 2021 value.

“International wheat prices rose for a fourth consecutive month, up 5.6% in May, to average 56.2% above their value last year and only 11% below the record high reached in March 2008,” it said on Friday.

“The steep increase in wheat prices was in response to an export ban announced by India amidst concerns over crop conditions in several leading exporting countries, as well as reduced production prospects in Ukraine because of the war,” it said.

In contrast, international coarse grain prices declined by 2.1% in May but remained 18.1% above their value a year ago.

Slightly improved crop conditions in the United States of America, seasonal supplies in Argentina and the imminent start of Brazil’s main maize harvest led maize prices to decline by 3.0%, however, they remained 12.9 % above their level of May 2021, it said.

International rice prices increased for the fifth successive month in May.

Quotations strengthened in all the major market segments, but monthly increases were least pronounced (2.6%) for the most widely traded Indica varieties, amid ample supplies, especially in India, it said.

The FAO Sugar Price Index declined by 1.1% from April, as a bumper crop in India buoyed global availability prospects.

The weakening of the Brazilian real against the US dollar, along with lower ethanol prices resulted in further downward pressure on world sugar prices.

“The FAO Sugar Price Index averaged 120.3 points in May, down 1.3 points (1.1%) from April, marking the first decline after sharp increases registered in the previous two months,” the agency said.

“The recent monthly decline in international sugar price quotations was triggered by limited global import demand and good global availability prospects, mostly stemming from a bumper crop in India,” it said.

Last month, India announced that it was banning wheat exports in a bid to check high prices amid concerns of wheat output being hit by the scorching heat wave.

Wheat exports were allowed on the basis of permission granted by the Indian government to other countries to meet their food security needs and based on the request of their governments.

Minister of State for External Affairs V. Muraleedharan had told the Ministerial Meeting on ‘Global Food Security Call to Action’ chaired by the US Secretary of State Antony Blinken under the US Presidency of the UN Security Council for the month of May that India is “committed to ensuring that such adverse impact on food security is effectively mitigated and the vulnerable cushioned against sudden changes in the global market. In order to manage our own overall food security and support the needs of neighbouring and other vulnerable developing countries, we have announced some measures regarding wheat exports on 13 May 2022.

“Let me make it clear that these measures allow for export on the basis of approvals to those countries who are required to meet their food security demands. This will be done on the request from the concerned governments. Such a policy will ensure that we will truly respond to those who are most in need,” he added, emphasising that India will play its due role in advancing global food security.

Labourers loading wheat at APMC wholesale market outskirts of Ahmedabad on May 17, 2022. 
| Photo Credit: Vijay Soneji

The Centre has amended its wheat export ban order of May 13 to allow export consignments that were registered in the Customs Department’s systems and handed over for examination on or prior to May 13 to be shipped out, the Commerce and Industry Ministry said on Tuesday.

The government also allowed shipment of a wheat consignment headed for Egypt, which was already under loading at the Kandla port, following a request by the Egyptian Government. A bulk of the 61,500 metric tonne wheat consignment had already been loaded for shipping to Egypt. The Centre has now permitted the exporter to load the remaining 17,160 metric tonnes so that the full consignment can sail out from Kandla.

Reiterating the intent behind last week’s ban order, the ministry said the decision would ensure food security and rein in inflation, while maintaining India’s reliability as a supplier as it would help other countries facing food deficits. The order also aimed to provide a clear direction to the wheat market to prevent hoarding of wheat supplies, the ministry asserted.

The export curbs notified last week came within a couple of days of the ministry’s announcement that official delegations would travel to several countries to pitch Indian wheat exports.

The curbs would not apply in cases where prior commitments had been made by private trade through Letters of Credit as well as in situations where permission is granted by the Centre following requests made by the governments of other countries to meet their food security needs.