India Resumes Wheat Exports After Four-Year Lull as Global Buyers Assess Market Prices

India Resumes Wheat Exports After Four-Year Ban

Indian traders have begun exporting wheat for the first time in four years, as ample stocks, higher global prices, and firmer freight rates have opened a window for them to make small shipments to buyers in Asia and the Middle East. Trade sources reported that ITC, a consumer goods conglomerate, has started loading 22,000 metric tons of wheat at the western port of Kandla for shipment to the United Arab Emirates.

India, the world's largest wheat producer after China, has allowed exports of the grain this year, lifting a ban on overseas sales imposed in 2022. The ban was extended in 2023 and 2024 after extreme heat shrivelled crops and depleted stocks, pushing domestic prices to record highs and fuelling speculation it might need to import wheat for the first time since 2017. However, last year's favourable weather led to a robust harvest, quashing speculation about imports and helping the government rebuild depleted reserves.

In a significant move, the government allowed traders to export 2.5 million tons of wheat earlier this year, before permitting another 2.5 million tons late last month for shipments. Despite the permission to export, lower global prices and higher Indian rates initially dissuaded traders from signing export deals. However, the Iran conflict has pushed up freight costs, and some buyers who need immediate shipments have turned to India.

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The deal to export 22,000 tons of wheat to the United Arab Emirates was signed at around $275 per ton free on board. Despite the first export deal in four years, India is unlikely to see a surge in wheat exports, as domestic prices have risen in recent days due to crop damage, making Indian wheat more expensive than rival supplies from Australia or the Black Sea region.

As a result, only buyers with immediate supply gaps are likely to turn to Indian wheat, while those with adequate inventories of Australian, Argentine, or Black Sea supplies will find it less attractive given its relatively higher prices. Importers with urgent, short-term requirements and seeking shipments within 30-45 days are the most likely to buy Indian wheat.