More Stories

Informist, Saturday, Feb. 14, 2026

 

By Shreya Shetty and Afra Abubacker

 

MUMBAI – The government's decision to open up wheat exports after a gap of nearly four years is unlikely to spur demand for the staple grain from India because of higher prices vis-a-vis other countries, analysts and market participants said. Though the industry sees the shift in policy as a positive, they believe the decision is slightly premature as the new crop is yet to mature.

 

The government Friday allowed export of 2.5 million tonnes of wheat and another 500,000 tonnes of wheat products, over and above the 500,000 tonnes announced on Jan. 16. India had curbed wheat exports in May 2022.

 

"There is no price parity. Indian wheat will only be sold if the global market prices rally up a bit," said Ajay Goyal, chairman of the Wheat Products Promotion Society and the managing director of Shivaji Roller Flour Mills. "But right now, there will not be much demand for Indian wheat or wheat products globally."

 

According to analysts, Indian wheat exports are priced anywhere between $280 per tonne and $300 per tonne, which is much higher than the prevailing global rate of $200-$270 per tonne. "In best case scenario, Indian wheat can be sold around the $290-$295 per tonne level," a commodity trader at an international trading company said.

 

"There will be little demand for Indian wheat unless the government decides to subsidise wheat exports, which will be a very sad situation," said G. Chandrashekhar, a commodity expert and policy commentator.

 

One of the main reasons for the higher Indian wheat prices is the minimum support price, which keeps the market from determining prices, experts said. The increase in minimum support prices by the government every year also keeps Indian wheat priced at a premium over exports from other countries, they said. For the 2026-27 rabi marketing season, the government has set the minimum support price at INR 2,585 per 100 kg, up INR 160 per 100 kg from the previous year.

 

"Indian market needs to crash to have some kind of export parity," said Sandeep Bansal, director, Grain Flour India Pvt. Ltd. "Bangladesh has imported wheat at $260 per tonne until April and May. So, at our current prices, we don't even have export feasibility to nearby markets such as Bangladesh," he said.

 

The only Indian wheat exports which seem feasible in the near term are small quantities which could be bought by Bangladesh and Nepal – only because they are joint by rail and road to India, experts said. Even then, both countries, especially Bangladesh, are being offered wheat by countries such as Argentina, Russia, and Ukraine at much lower rates, they said.

 

In the medium term, price parity in wheat exports could be achieved if there is a bumper rabi crop, which could bring domestic prices down, said G.K. Sood, chairman, MEIR Commodities. The market is currently projecting a record output of wheat this year due to increase in acreage. In 2024-25 (Jul-Jun), wheat production was at a record 117.94 million tonnes.

 

However, it would be a bit early to bank on a record output as the wheat crop is still in a crucial period of maturity, and how the weather plays out in February could impact the crop, Sood said. Based on India Meteorological Department's forecasts of above-normal temperatures during the month, the crop could face heat stress which could impact output or yield, experts said.

 

WHY NOW?

In its notification, the government cited comfortable supply of wheat in the country for opening up wheat exports. According to the Centre, wheat stocks with private trade entities are pegged around 7.5 million tonnes, up from 3.2 million tonnes a year ago.

 

Moreover, the closing stock of wheat with Food Corp. of India is projected at 18.2 million tonnes as of Apr. 1, up from 11.8 million tonnes a year ago, the government said. However, experts disagree with this estimate, saying that the government is underestimating the number hoping to offload more wheat through its ongoing open-market sales scheme.

 

"The government has projected it to be lower, at 18.2 million tonnes, market expectation is higher around 21–22 million tonnes," Sood said. FCI's sale of the staple grain has been met with poor response so far, with barely half of the offered amount being sold in its seventh round of auction under the scheme last week.

 

Some analysts believe the government wants to do away with some of the pressure of its massive wheat stocks by opening up exports. "The government wants to vacate warehousing space as they need it before arrivals of the new rabi crop begin," Chandrashekhar said.

 

Food Corp. of India held 27.5 million tonnes of wheat stocks as of Jan. 1, up 49% on year. The current wheat stocks are well above the buffer norm for the March quarter at 13.8 million tonnes, which includes an operational stock of 10.8 million tonnes and a strategic reserve of 3 million tonnes.

 

Although FCI wheat cannot be bought for export purposes, analysts said demand for the grain in the corporation's open market sales is likely to increase as mandi arrivals will also face competition from exporters. This is likely to give farmers another promising way to sell their crop than having to rely mostly on the government's procurement.

 

"Export permission is a good move as at any time there would be export possibility, and some relief to the farmer, who might struggle to get even the minimum support price for wheat from private buyers this time of the year," Sood said.

 

On the other hand, some market participants believe the move is simply to appease farmers in the short term. "It is more of a sentimental support for the market," the commodity trader said.

 

EXPORT OF WHEAT PRODUCTS

Analysts are more critical of the government's decision to allow export of wheat products. The process of registering oneself for exporting wheat products is too tedious and complicated, resulting in little to no exports.

 

"Applications (for wheat product export registrations) are opened, but there is a lot of paperwork, and there were some hurdles in the payment gateway as well," Bhansal said. "They have made certain rules and pre-requirements. Because of that, none of the millers have been able to get an export licence or permission," he added.

 

Unlike wheat, India has export parity in wheat products such as wheat flour and semolina, which presents a good opportunity for establishing the country's foothold in these markets, market participants said.

 

"But because of the licencing issue, even earlier allocation for wheat products did not result in any export contracts or shipments," Bhansal said.

 

"The government should have made the process of exporting wheat products freer, more open," Goyal said.  End

 

With inputs from Pallavi Singhal

Edited by Ashish Shirke

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

 

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2026. All rights reserved.