India's surprise wheat export ban traps 1.8 mt at ports, says report

India's wheat export ban has trapped some 1.8 million tonnes (mt) of grain at ports, leaving traders facing heavy losses from the prospect of selling onto a weaker domestic market, four dealers told Reuters.

Only exports backed by letters of credit (LCs), or payment guarantees, issued before May 13 can proceed before the ban takes effect, India has said.

But of the around 2.2 mt of wheat currently at ports or in transit there, traders have LCs for only 400,000 tonnes, a Mumbai-based dealer with a global trading firm said.

"Exporters don't know what to do with the remaining 1.8 mt. Nobody thought the government will outright ban the exports," said one dealer, who declined to be named due to company policy.

One Mumbai-based trader said the ban could force it to declare force majeure on shipments to overseas customers.