Emirates won’t allow re-exports of Indian wheat to other countries for four months.
The UAE, on Tuesday, decided to suspend re-exports of wheat from India. For four months, the UAE will not export Indian wheat to other countries. It assured New Delhi to use imports for domestic consumption only. The gulf nation’s economic ministry also cited disruptions in trade flows as one of the reasons behind its move.
“India doesn’t want its wheat exported to Dubai or Abu Dhabi to go out to other countries, whether as grain or as flour. It would want that wheat to be consumed locally, including by migrant Indian workers” trade sources said to the Indian Express. India, in turn, would also make some exceptions and send its wheat to the gulf country.
India Banned Wheat Exports Last Month
On May 14th, India banned wheat exports to the whole world. It however made an exception for outstanding contracts backed by previously issued letters of credit. New Delhi also agreed to export wheat to countries based on their case-to-case food security concerns. Since then, India has exported 469,202 tons of wheat. Companies wishing to export or re-export Indian wheat brought in UAE before May 13 will now have to approach the economy ministry.
Both UAE and India signed the Comprehensive Economic Partnership Trade Agreement (CEPA) in February. According to this agreement, both countries aim to cut their tariffs. They would also increase their annual trade to $100 billion in five years. So far India has exported 4.71 lakh tonnes of wheat to the Emirates. This is valued at around $136.53 million. The exports constitute around 6.5% of its total 72.35 lt shipments. It doesn’t mean much to India, but it’s not small for UAE either.
Estimates from the US Department of Agriculture suggest that UAE consumes 15lt of wheat annually. Much of this is imported. UAE imports 50% of its wheat from Russia, Canada and Australia. During 2021-2022, India supplied 1.88 lt of wheat to UAE. India’s wheat exports rose further before the Ukraine war disrupted wheat exports and a heat wave impacted supply and prices. The crises forced India to curtail wheat exports everywhere.
(Inputs from the Indian Express)
