India limits wheat flour export to curb price rise

Ukraine war leads to surge in demand

August 25, 2022 09:06 pm | Updated August 26, 2022 09:49 am IST - New Delhi

A worker arranges sacks of wheat flour inside a factory in Siliguri.

A worker arranges sacks of wheat flour inside a factory in Siliguri. | Photo Credit: Reuters

The Central government has decided to restrict the export of wheat flour in order to curb the rising prices of the commodity and ensure food security of the most vulnerable sections of the society. The decision was taken by the Cabinet Committee on Economic Affairs (CCEA) chaired by Prime Minister Narendra Modi here on Thursday.

The government will accordingly amend the policy of exemption for the commodity from export restrictions or ban.

The Directorate General of Foreign Trade (DGFT) will issue a notification to this effect, a Government release said. The decision is taken against the backdrop of the Russia-Ukraine war. The Centre said both the countries are the major exporters of wheat accounting for around 1/4th of the global wheat trade and the conflict between them led to the global wheat supply chain disruptions increasing demand of Indian wheat. “As a result, the price of wheat in domestic market showed an increase. In order to ensure food security of 1.4 billion people of the country, the decision was taken to put a prohibition on export of wheat in May 2022,” the release said.

However, the Centre said, due to the prohibition on export of wheat, the demand for wheat flour has increased in foreign markets and its exports have registered a growth of 200% during April-July 2022 compared to the corresponding period in 2021. “The increased demand for wheat flour in international market led to significant price rise of wheat flour in the domestic market,” the release added.

“Earlier, there was a policy not to prohibit or put any restrictions on the export of wheat flour. Therefore, a partial modification of the policy was required by withdrawing the exemption from ban/ restrictions on export for wheat Flour in order to ensure food security and put a check on mounting prices of wheat flour in the country,” the release added.

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