Cabinet allows govt to put restriction on export of wheat flour

The Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, has approved the proposal for amendment of the policy of exemption for wheat or meslin flour from export restrictions. This was stated in a CCEA press release on August 25.

The approval will now allow the government to put a restriction on the export of wheat flour, ensuring a curb on rising prices of wheat flour and the food security of the most vulnerable sections of society.        

The Directorate General of Foreign Trade (DGFT) shall issue a notification to this effect, says the release.

Russia and Ukraine are the major exporters of wheat, accounting for around 1/4 of the global wheat trade. The conflict between them led to the global wheat supply chain disruptions increasing the demand for Indian wheat. As a result, the price of wheat in the domestic market showed an increase. In order to ensure the food security of the 1.4 billion people of the country, a decision was taken to prohibit the export of wheat in May 2022.

However, due to the prohibition on the export of wheat, the demand for wheat flour has increased in foreign markets. The exports of wheat flour from India have registered a growth of 200 per cent during April-July 2022 compared to the corresponding period in 2021.

The increased demand for wheat flour in the international market has led to a significant price rise of wheat flour in the domestic market.

In order to tackle this challenge, a policy change was needed. So far, there has been a policy not to prohibit or put any restrictions on the export of wheat flour. However, in July, a DGFT notification said the government had imposed a condition on exports of wheat flour. “Export policy of wheat flour (atta) remains free but export shall be subject to the recommendation of (the) inter-ministerial committee on export of wheat,” the July notification had said.

But this perhaps was not enough. Therefore, a partial modification of the policy was required by withdrawing the exemption from the restrictions on the export of wheat flour. And this perhaps is what prompted the August 25 CCEA decision.

In 2021-22, India exported wheat flour worth $246mn. During April-June this year, the exports stood at about $128mn.

Meslin flour is a wheat and rye blend that is sown and harvested together. It is typically traded alongside wheat. It was grown on our farms before World War II, but only a few farmers sow it now.