Govt weighs wheat export cap, more rice in food scheme

A limit on wheat exports and the use of more rice in its place in the national food programme are among measures the government is considering to rein in prices of wheat and flour.

Local prices of wheat and atta have risen sharply as India has stepped up exports of the cereal following a nearly 40% rally in global rates in the wake of the Russia-Ukraine conflict.

This year's wheat production is pegged at 95 million tonnes (mt) by traders, against government estimates of 105 mt, likely tightening local supplies and causing prices to rise. Wheat is priced at ₹2,550 per quintal (100 kg) at Kandla port, having risen sharply recently as exporters are trying to speed up shipments, anticipating curbs by the government.


Minimum support price (MSP) for wheat procurement is ₹2,015 per quintal. Retail inflation in wheat and atta spiked to 9.59% in April, from 7.77% in March. The government's wheat procurement has fallen nearly 55% as open market prices are higher than MSP.

Measures Ahead
Indian traders have contracted for export of 4.5 mt of wheat till June, while actual exports in April were 1.4 mt.

The Roller Flour Millers Federation of India discussed wheat availability with food secretary Sudhanshu Pandey on Thursday.

"The millers expressed their concern about the availability of wheat in the country post the harvest season in light of reduced crop size and reduced ability of the government to intervene and cool prices by offering OMMS (open market sale scheme) wheat, due to lower procurement," said a miller who was present at the meeting.

The food ministry is trying to ensure there is enough supply in the domestic market at reasonable prices without disturbing exports, said people with knowledge of the matter.

However, if prices rise further, the government may impose quantitative limits on exports. The other option is to substitute 5-7 mt of wheat with rice, for distribution under National Food Security Act schemes. "This wheat can then be used for OMSS sales to control inflation," said a person aware of the matter.