05 July 20227 min reading

The US Department of Agriculture (USDA) revised down its wheat export forecasts for India after the Modi government's decision to restrict wheat sales to abroad as of May 13. In a report released by USDA on 8 June, India's export forecast for the 2022-23 season (July-June) was revised as 6 million tons with a decrease of 2 million tons. The export ban comes after a heatwave scorched India’s wheat belt this spring, leading to a smaller-than-expected 2022 crop.

India’s export ban removes another source of affordable wheat for many low-income importing countries, adding stress to an already tight global market. Strong global demand has outpaced production, driving world wheat prices to their highest levels in a decade. In 2020/21, India emerged as an important wheat exporter to the Middle East and South Asia. Wheat exports in 2021/22 had been growing significantly, with exports reaching a record 6.8 million tons in the first 9 months of the trade year. Additionally, India’s exports have extended to markets traditionally supplied by Ukraine. India has suggested it may allow some exemptions to the ban on a case-by-case basis for government-to government sales for food security reasons. It has received requests for more than 1.5 million tons from several countries under the exemption.

In addition to the export ban, the government of India is adjusting its domestic food security policies. Due to the tight wheat supply situation, the government has shifted to procuring and distributing more rice and less wheat in its food security programs. As a result, overall wheat consumption in India is forecast to decline, while rice consumption is forecast to rise.

Unlike wheat, India rice supplies are plentiful in 2022/23. Rice exports are forecast to remain robust as India remains the dominant global rice exporter. Following multiple seasons of record crops, rice stocks have more than doubled in recent years, leaving ample room for both exports and higher domestic use. Despite increased exports and more distribution for the government’s food security programs, India’s rice stocks are still expected to rise. The ample supply situation suggests that export restrictions on rice are less likely.

India is the world’s second-largest producer of rice and wheat and by far the largest producer of pulses. Wheat and rice are the cornerstones of India’s food security policy. The Indian government allocates significant funding to support research, development, and extension activities to educate farmers about new varieties and improved production technologies for these crops. Central and state governments also support farmers by subsidizing inputs (water, fertilizer, seed, power, irrigation, chemicals, and agricultural credit) for crops like wheat.

Wheat is the staple food in northwest and central India. It competes with rice in wheat non-growing regions in south and east India. Households, local restaurants, and eateries account for about 80 percent of the wheat domestically consumed in India. Some wheat is used for processed food products such as raised bread, biscuits (cookies), and other bakery items (about 12-15 percent). There is also a small market for high-quality wheat (4-5 MMT) for western-style pasta, and baking/confectionery foods.

On May 19, 2022, the Ministry of Agriculture and Farmers Welfare (MOAFW) released the Third Advance Estimates of Production of Food Grains for the Indian Crop Year (ICY) 2021/2022 (July-June), lowering the forecast grain production estimate to 314.5 million metric tons (MMT). The forecasted lower production is due to the expected lower wheat (106.4 MMT) and barley (1.6 MMT) harvests resulting from unprecedented high and sustained temperatures during the critical milking/seed setting stage. The grains crops’ overall forecasted decline, however, is partially offset by expected higher production of rice (record 129.7 MMT), corn (record 33.2 MMT), pulses (record 25.8 MMT).


USDA lowered its India MY 22/23 (April-March) wheat production forecast to 99 MMT compared to the pre-harvest forecast of 110 MMT. “New Delhi Post is lowering the forecast on the reported yield loss due to extreme temperatures which began the second week of March during the critical milking/seed setting stage throughout the major wheat-growing areas,” USDA noted in its India report. The latest forecast of the Indian government is 106.4 million tons.

The Indian government will permit wheat exports to continue to neighboring countries including Bangladesh, Nepal, Sri Lanka, and other food security vulnerable countries. Most trade sources had been expecting India to export about 5-6 MMT of wheat and wheat products as Indian wheat is now highly competitive in the nearby region ($50 to $80 lower than other origins). Assuming no momentous change in the existing export policy, USDA forecasts MY 22/23 wheat and wheat products exports to reach 6 MMT. And based on the forecast of lower government wheat stocks and expected government wheat offtake under various programs during the year, USDA’s MY 22/23 ending wheat stocks figure is lowered to 8.5 MMT.

There are some obstacles to India's goal of increasing wheat exports, such as logistical bottlenecks at ports and railways, high freight rates and a lack of containers. For India to be a long-term supplier, it must also achieve the desired standard in wheat quality. India was the second-largest wheat producer with a share of approximately 14% in world wheat production in 2020, but its share in global wheat exports remained below 1%. India is an erratic participant in the international wheat market. It imports wheat in low production years, and exports when local supplies are sufficient and prices are competitive.


Rice is India’s most important food crop, representing 40 percent of food grain production. Rice is the major staple cereal for 70 percent of the population, with the balance consuming rice with wheat or other cereals. India grows more than 4,000 rice varieties. The vast majority (90 percent) of farms are small (less than 2 hectares), and farmers retain 45-50 percent of production for their consumption (locally milled) and seed use. Most of the coarse rice production (high yielding/hybrid rice) is procured by the government, with smaller quantities purchased by private trade for exports. Locally preferred rice cultivars are procured by private trade and marketed in bulk and unbranded. A small, but growing, share of rice is branded and marketed in consumer packaging. Long grain Basmati rice and other specialty/fragrant rice varieties are procured by millers for export, as well as for domestic sales in bulk or branded/packages.

USDA’s MY 21/22 (October-September) rice production estimate is raised to 129.5 MMT based on the estimated higher fall harvested production from the official third advance estimate. Increased government procurement and market prices support the higher official rice production estimates. USDA's 2022-23 season forecast is 130 million tons.

India’s MY 21/22 rice consumption estimate is raised to 109.5 MMT on higher use of government rice in May-September 2022 under the food assistance and security programs. “Increased allocations of rice will drive MY 21/22 consumption to 109.5 MMT. The MY 22/23 consumption forecast stays unchanged at 107 MMT,” USDA says.

Sources report stronger export offtake of wheat during March/April slowed down rice exports due to port congestion. However, rice exports will recover in the coming months as Indian rice remains more price competitive compared to other origins. USDA continues to estimate MY 21/22 rice exports unchanged at 21 MMT, and MY 22/23 exports at 22 MMT.

Corn is the most important crop in India after rice and wheat. USDA’s MY 21/22 corn production estimate is 33 MMT. The production forecast for the next season is 31.5 million tons.

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