India OKs Ag Exports to Placate Farmers
India's on Friday allowed the export of 2.5 million metric tons of wheat and an additional 500,000 tons each of wheat products and sugar, as the world's second-biggest producer of both commodities seeks to support local growers amid protests over a trade deal between New Delhi and Washington.
On Thursday, thousands of farmers staged demonstrations, alleging the government had compromised their interests under the interim U.S.-India trade framework, though the trade minister said safeguards were in place.
Announcing the decision in a statement, the federal government said the aim was to stabilise domestic markets and ensure financial returns for farmers, following a review of current supply and price trends.
Last month, the federal government allowed exports of 500,000 tons of wheat flour and other wheat products, after approving exports of 1.5 million tons of sugar in November for the season that began on October 1.
Traders said the permission to export was likely to improve sentiment in the local market, but fulfilling the allocated volumes may be difficult.
Sumit Gupta, CEO of Waseda Global, a Gurugram-based commodity brokerage, said Indian prices' hefty premium over other origins would be a challenge.
Indian wheat is offered at around $280 per ton free-on-board basis, compared with about $200 per ton for Argentine supplies.
Bangladesh, a neighbouring buyer, is securing better-quality wheat at around $260 per ton, on a cost-and-freight basis, he said.
India banned wheat exports in 2022 and extended the prohibition after extreme heat shrivelled crops again in 2023 and 2024, draining reserves, pushing domestic prices to record highs and fuelling speculation that it might need to import wheat for the first time since 2017.
However, conditions improved last year, with better weather, higher-yielding climate-resilient seeds and adequate soil moisture from two consecutive monsoons, raising the chance of another strong harvest this year.
In 2025, India produced a record 117.9 million metric tons of wheat.
Of the 1.5 million tons allowed for export this season, Indian sugar mills have shipped around 197,000 tons as of January 31, and have contracted an additional 272,000 tons tons, the government said.
An extra 500,000-ton export quota will be made available to willing mills, provided they ship at least 70% of their previously allocated quantity by June 30, it said.
Mills are struggling to ship their already allocated export quotas due to weak global prices, Deepak Ballani, director general of the Indian Sugar & Bio-Energy Manufacturers Association (ISMA), told Reuters.
In this context, the additional 500,000-ton allowance is unlikely to materially change the industry's outlook, though it may slightly ease domestic supply pressures, Ballani said.
Indian sugar is now being offered at around $445 per ton on a free-on-board (FOB) basis, or nearly $50 per ton above benchmark London futures LSUc2, dealers said.
(Reuters)
