India approves additional 2.5 million mt of wheat exports

India will release an additional 2.5 million metric tons of wheat for exports, doubling its total export quota to 5 million mt, according to a document by India's Ministry of Consumer Affairs, Food and Public Distribution April 20, seen by Platts, part of S&P Global Energy.

The ministry said the increase in export quota "is expected to enhance market liquidity, facilitate efficient stock management, and prevent distress sales during the peak arrival season," along with stabilizing domestic prices and strengthening farmers' incomes.

Prior to this, India had announced an export quota of 2.5 million mt for wheat and 1 million mt for wheat products in February.

Market participants had told Platts that the quota could double amid rising inventory levels.

However, according to several Asia-based sources, skepticism persists about how competitive Indian wheat would be in export markets as Indian wheat prices remain too high compared to international levels,amid high global supply and upcoming harvests from Northern Hemisphere exporters.

"The decision is structurally supportive for domestic price discovery and farmer incomes, as it helps absorb excess supply pressure. However, global competitiveness remains a limiting factor given India's relatively higher wheat prices versus Black Sea & SOAM origins, implying exports may remain policy-driven rather than demand-led unless price differentials narrow," Ankit Maheshwari, director at Full Circle Commodities, said.

"There is no shortage of wheat in the world at the moment," said a Perth-based trade source.

Indian wheat with 10.5%-11% protein is being offered for spot shipment at $270/mt FOB Kandla, close to offers of Australia Premium White wheat out of Western Australia, according to several Singapore-based grains traders.

Platts assessed Australian Premium White wheat at $269/mt FOB Kwinana on April 20, unchanged day over day.

A Singapore-based source said high Indian wheat prices, coupled with potential quality concerns compared to other origins, would remain a key hurdle toward the expansion of Indian wheat exports globally.

"On pricing, we [India] are nowhere close to international levels. With Black Sea crop less than four months away, it [is] only going to get even tougher to price unless some geopolitical situation supports us," said a South Asia-based grains broker.

Indian wheat is being offered at $285/mt CFR Rohanpur, Bangladesh, through rake, a Delhi-based market participant said, adding that wheat exports are unviable unless global prices increase.