Wheat flour exports raised after ban on the grain’s exports

Exports of wheat flours have witnessed a sudden spike in the after the ban the outbound shipment of wheat, indicating that many traders may be using this route to beat the ban on the grain’s exports. The spike is likely to alarm the government, which has already tightened its scrutiny of wheat shipments.

Wheat flour exports may have increase at least 7-8 times sequentially since the wheat export ban was imposed. Usually monthly exports at this time of the year are about 6,000-8,000 tonnes. However, the shipments in the month since the ban, which was imposed on May 13, could be at least 60,000-70,000 tonnes, according to the sources.

On Friday, commerce, industry and food minister Piyush Goyal warned traders of action if they are found to have used illegal, back-dated letters of credit (LCs) to seek permits to ship out wheat. While prohibiting wheat export to control soaring prices, the government had made it clear that supplies that are backed by LCs issued before the ban would to be allowed.

Eventually, the commerce ministry partially eased the order and allowed shipments of wheat consignments that were either handed over to the Customs authorities for examination or registered in their systems by May 13. This relaxation alone was estimated to facilitate clearance of about 3.5 lakh tonnes of wheat.

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