India is the largest rice exporter and second-largest wheat producer in the world. Back in 2022, it banned exports of wheat and wheat flour and also imposed a 20% duty on exports of all varieties of non-basmati rice except parboiled rice, and this sent shockwaves throughout the global grain trade. It’s almost a year and the Government of India is yet not convinced to lift the ban on exports of wheat and wheat flour. For the interest of consumers and to protect them from any price hike, the GOI has decided against lifting the ban on exports of wheat & wheat flour or 20% duty on rice exports.

Market Reaction

India commands a mammoth 40% share in the global rice trade and restrictions on rice exports, imposed by the GOI in September 2022 raised serious troubles for countries heavily reliant on India for their rice needs. With GOI refusing to change its stance even after a period of 8 long months, it is crucial for rice-importing nations to explore alternative sources for meeting their domestic demands. To ensure an unhindered, consistent, and stable rice supply, it has become important for them to diversify their supply chain and develop relationships with other nations as well for rice imports.  

The decision has also affected the domestic rice exporters. They have been forced to diversify their offerings and focus on domestic markets to mitigate the financial strain caused by this decision.

Talking of wheat, India does not feature in the list of top 10 exporters of the world. Owing to high consumption needs, the Asian nation shares a mere 3% of the global wheat trade. However, the demand for Indian wheat shot up in the aftermath of the Russia-Ukraine war, and consequently, to stabilize the prices and ensure that adequate supplies remain for domestic consumption, the GOI banned exports of wheat and wheat flour in May, 2022. A year later, it still fears that lifting the restrictions on exports of wheat and wheat flour would lead to a price rise and hence has decided against it. What this means is, wheat importing nations hopeful of GOI lifting the wheat export ban need to diversify and establish long-term relationships with reliable global wheat suppliers.

The Bottom Line

India’s stand to continue with the wheat export ban and restrictions on rice exports put market players in a fix. The rice exporters of the country have to deal with declining market share, while the rice importers need to find alternative sources for their bulk procurements. 

The same holds true for wheat exporters and wheat importers. While the former need to focus on the domestic market, the latter must identify reliable global wheat suppliers to navigate supply constraints. Responsiveness and agility are going to be crucial in adapting to the evolving dynamics of the global grain trade.

If you are a rice exporter or wheat exporter looking to export bulk rice or wheat or are a rice importer or wheat importer looking to import bulk rice or wheat, then Tradologie.com is the platform for you. Tradologie has over 600,000 verified buyers and 70,000+ verified suppliers in its network and through the platform, you can connect and conduct bulk trade of food and agro-commodities with ease.

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