India to Permit Wheat Shipments Pending Customs Clearance, Reports Reuters

NEW DELHI – The Indian government announced on Tuesday that it will permit the export of wheat shipments awaiting customs clearance, relaxing earlier restrictions imposed on overseas sales of the staple food following a ban enacted on Saturday.

Additionally, the government stated that wheat exports to Egypt will also be allowed.

The government clarified that wheat consignments which have been submitted to customs for examination and registered in their systems as of May 13, 2022, or earlier, will be eligible for shipment.

This change comes after India instituted a ban on wheat exports just days after declaring its goal for record shipments of 10 million tonnes for the year. The decision to ban exports was largely prompted by a severe heatwave that affected production, alongside a surge in domestic prices reaching unprecedented levels.

Exports will now require backing by letters of credit (LCs) or payment guarantees issued prior to May 13.

However, this new provision has introduced a level of uncertainty into the market. Of the estimated 2.2 million tonnes of wheat currently at ports or in transit, traders noted that only around 400,000 tonnes have the necessary letters of credit.

The export ban has also resulted in about 1.8 million tonnes of wheat being stranded at ports, leaving traders at risk of significant losses if forced to sell in a weaker domestic market.