Cabinet approves curbs on wheat flour export to control domestic prices

Russia and Ukraine are the major exporters of wheat accounting for around one-fourth of the global wheat trade. The conflict between them led to the global wheat supply chain disruptions increasing demand for Indian wheat. As a result, the price of wheat in the domestic market showed an increase. To ensure food security for 1.4 billion people in the country, the decision was taken to put a prohibition on the export of wheat in May 2022.

New Delhi:Amid the Russia-Ukraine conflict, the Cabinet Committee on Economic Affairs on Thursday approved curbs on the export of wheat flour. The Cabinet Committee on Economic Affairs chaired by Prime Minister Narendra Modi has approved the proposal for amendment of the policy of exemption of wheat or meslin flour from export restrictions. The approval will now allow putting a restriction on the export of wheat flour, which will ensure a curb on rising prices of wheat flour and ensure food security for the most vulnerable sections of society. The Directorate General of Foreign Trade (DGFT) shall issue a notification to this effect.

Russia and Ukraine are the major exporters of wheat accounting for around one-fourth of the global wheat trade. The conflict between them led to the global wheat supply chain disruptions increasing demand for Indian wheat. As a result, the price of wheat in the domestic market showed an increase. To ensure food security for 1.4 billion people in the country, the decision was taken to put a prohibition on the export of wheat in May 2022.

However, due to the prohibition on the export of wheat (which was done to put a check on increasing prices in the domestic market and to ensure food security in the country), the demand for wheat flour has increased in foreign markets and its exports from India have registered a growth of 200% during April-July 2022 compared to the corresponding period in 2021. The increased demand for wheat flour in the international market led to a significant price rise of wheat flour in the domestic market.

Earlier, there was a policy not to prohibit or put any restrictions on the export of wheat flour. Therefore, a partial modification of the policy was required by withdrawing the exemption from the ban/restrictions on the export of wheat flour to ensure food security and put a check on the mounting prices of wheat flour in the country.