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Wheat export ban to help control prices, regulate trade, says govt

'There is no dramatic fall in production. I do not think there is a crisis which needs to be imagined. There is adequate food available in government stocks and private stocks,' says commerce secy

wheat | food inflation

Press Trust of India  |  New Delhi 

wheat production
Photo: Bloomberg

Asserting that there is no supply crisis in the country, Commerce Secretary B V R Subrahmanyam on Saturday said the government's decision to ban exports will help in controlling rising domestic prices and meeting the food requirement of India's neighbours and vulnerable countries.

The government has banned exports with immediate effect. However, the export shipments for which irrevocable letters of credit (LoC) have been issued on or before the date of this notification will be allowed.

Subrahmanyam said that the decision was taken at the right time.

"There is no dramatic fall in production. I do not think there is a crisis which needs to be imagined. There is adequate food available in government stocks and private stocks," he said while addressing a joint press briefing along with counterparts in the departments of food and agriculture.

Explaining the rationale behind the decision, the commerce secretary said the primary goal was to put a "check on inflation".

"So, what is the purpose of this order. What it is doing is in the name of prohibition - we are directing the wheat trade in a certain direction. We do not want the wheat to go in an irregulated manner to places where it might get just hoarded or where it may not be used to the purpose which we are hoping it would be used for," Subrahmanyam said.

The focus has also been given to ensuring adequate food stock availability within the country.

"At the end of the day, food is a very sensitive item for every country because it affects everybody - poor, the middle and the rich," he said, adding the wheat flour prices have gone up in some parts of the country by about 40 per cent.

The government is also committed to ensuring the food security of neighbours and vulnerable countries.

"So, we have kept the window open for (our) neighbours. We have also kept the window open for a large number of vulnerable countries if their governments do make such requests," he added.

The secretary highlighted that the country has exported 7 million tonnes of wheat during the last fiscal, out of which about 50 per cent were shipped to Bangladesh.

Talking about the current fiscal 2022-23, he said as per estimates, 4.3 million tonnes of wheat have been contracted for exports so far.

Out of this, 1.2 million tonnes have already been exported in April and May, and another 1.1 million tonnes are expected to be shipped, he said, adding "if you have a valid order - irrevocable letters of credit - that contract will be honoured. So, India's credibility as a reliable supplier is maintained".

Further, he said that if the price situation improves, the government may review this decision.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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First Published: Sat, May 14 2022. 18:39 IST