- 16 May 2022
- ICICIdirect Research
GOVERNMENT OF INDIA BANS WHEAT EXPORTS
News: Indian Government bans wheat exports with immediate effect citing lower wheat production of ~100 million tonnes as against earlier expectation of 111 million tonnes due to extreme heat wave. The exporters with the LOC would be allowed to export
Views: Government agencies have procured ~18 million tonnes of wheat in the current procurement season as against 44 million tonnes last year. With the stock level of 18.5 million tonnes on 1st April 2022, the government is expected to have ~37 million tonnes wheat availability out of which ~30 million tonnes can be utilized for Food security, Mid-day meals & Garib Kalyan schemes. It is important to note that government distributed ~50 million tonnes of wheat in FY22. We believe government agencies are looking to procure close to 23 million tonnes in the current season & ban is expected to be lifted after that. ITC is one of the biggest exporter of wheat. We believe it would be negatively impacted by wheat export ban in near term
Impact: Negative