Exception to India’s wheat export ban – for previous contractual commitments, government-to-government sales, and food security purposes – are expected to support an export forecast of 7 million tonnes in 2022/23, remaining well above India’s export average over the past five years, the United Nations’ food agency has said.
The Food and Agriculture Organisation (FAO) said in its Food Outlook released on Thursday that global wheat markets are embarking on the 2022/23 season with a “great deal of uncertainty.
The impacts of the ongoing war in Ukraine, trade policy changes in several countries, and high international prices will shape much of the wheat market outlook, it said adding that international wheat prices are at levels not reached since 2008, following a season of tight global availability due to reduced harvests in some major exporting countries and export suspensions by others, including Ukraine (a major exporter) and India (an emerging exporter), along with supply concerns for 2022/23 also adding pressure.
Global wheat production in 2022 is predicted to decline from the 2021 record level by 0.8 per cent, reaching 771 million tonnes and marking the first drop in four years. Year-on-year falls in production in Australia, India, Morocco and Ukraine will likely outweigh expected increases in Canada, Iran and Russia.
The report said that driving much of the predicted contraction in world trade in 2022/23, exports by Ukraine, a major wheat exporter, are forecast to fall by nearly 50 per cent (down 9 million tonnes) from the previous season based on the assumption of continued war-related export disruptions.
In India, a ban on wheat exports announced last month, is also seen limiting shipments in 2022/23 after the country greatly increased its market share in 2021/22, amid lower exports from Ukraine, high domestic supplies following a record production in 2021, and competitive prices that helped to open trade with new markets, including Egypt and Vietnam.
However, exceptions to the export ban for previous contractual commitments, government-to-government sales, and food security purposes are expected to support an export forecast of 7 million tonnes in 2022/23, remaining well above India’s export average over the past five-years.
Further, it said that in Asia, wheat production in India is forecast at 105.5 million tonnes, down nearly 4 per cent from the record crop gathered in 2021.
Despite an above-average planted area, motivated by an increase in the government’s procurement price and favourable weather early in the season, this year’s foreseen decline is precipitated by unseasonably high temperatures in March and April that resulted in lower-than-expected yields and localised crop losses, it said.
Last month, India announced that it is banning wheat exports in a bid to check high prices amid concerns of wheat output being hit by a scorching heat wave. Wheat exports were allowed on the basis of permission granted by the Government of India 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 told the Ministerial Meeting on Global Food Security Call to Action’ chaired by 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, he had said.
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 had said, emphasising that India will play its due role in advancing global food security.
And it will do so in a manner in which it will uphold equity, display compassion and promote social justice.”
Further FAO said that international trade in rice is anticipated to expand for the third successive year in 2022, with volumes exchanged across the world forecast at 53.1 million tonnes, 3 per cent higher than the 2021 peak. India is predicted to remain the world’s largest rice exporter.
In Asia, total sugar production is forecast to increase for the second consecutive season in 2021/22.
Most of the increase stems from a bumper crop foreseen in India, while output is set to recover in Thailand. India is set to remain the world’s second largest sugar exporter for the second consecutive season, with sales likely reaching 9 million tonnes in 2021/22. In India, the world’s second largest sugar producer, production is forecast to reach a record high of 35 million tonnes, 13 per cent above its level in 2020/21.
This is the result of higher crop yields as well as greater sugar recovery rates due to the use of better seed varieties and timely application of fertilizers, together with conducive weather conditions.
Milk production in India is forecast to expand by 3.2 per cent to 217 million tonnes, driven by an expected increase in dairy herds, a moderate yield gain, and more efficient milk collection by dairy cooperatives, it said.