India is introducing wheat flour export restrictions aimed at cooling domestic food price inflation. The new measures, which take effect on Tuesday, require an Inter-Ministerial Committee to approve wheat flour export requests before wheat flour shipments go out.
This latest curb on wheat flour exports arrives amid escalating domestic food price inflation. India’s domestic prices for wheat and wheat products have increased by the high single digits compared with last year, as can be seen in this Gro Data Series chart. The proprietary Data Series aggregates local Indian prices to arrive at a national average.
CAPTION: India’s domestic prices for wheat and wheat products have been rising steadily, as shown by the Gro Derived average of wheat retail prices in India.
The move comes less than two months after India halted most wheat exports. In April and May, hot and dry conditions damaged India’s wheat crop, sending domestic prices higher and curtailing exportable supplies.
Wheat flour is used to make flatbreads such as chapati, roti, naan, paratha and puri, and it is the most widespread used flour in the Indian subcontinent. Annually, India exports about 7 million tonnes of wheat and 400,000 tonnes of wheat flour.
India, a top wheat producer, is the world’s fifth largest wheat flour exporter, and after Russia’s invasion into Ukraine in February, it looked poised to become a larger wheat exporter.
According to Gro data, India exported 95,094 tonnes of wheat flour in April 2022, a jump of nearly fourfold from the same time last year. The UAE and many African countries rank among India’s main wheat flour importers.
India’s increased use of export limits to keep domestic food prices in check parallels moves taken by other countries recently. In April, Indonesia enacted a palm oil exports ban that, despite being overturned three weeks later, had a dramatic impact on worldwide prices. In May, India also capped sugar exports, as Gro highlighted here.
For India, increased export restrictions could undermine efforts to take on a greater role in world agricultural exports. Despite the country’s large wheat production footprint, it has historically only exported grain when harvests are plentiful.