The government on Monday sought to tighten rules on exports of wheat flour and other related products and mandated that such despatches will be subject to the submission of quality certificates issued by the Export Inspection Council or its affiliates. The certificates will be over and above the current requirement of recommendations by an inter-ministerial panel.
Industry sources said the aim of the notification by the Directorate General of Foreign Trade (DGFT) is to discourage exports of wheat products to keep domestic supplies steady and prices under control.
The notification will come into effect from August 14. However, until August 14, those consignments that have already been handed over to the customs or where loading has taken place will be allowed to be despatched, according to the notification.
Last month, the DGFT notified that exports of wheat flour (atta), maida, samolina (rava/sirgi), wholemeal atta and resultant atta would be cleared only after the clearance by the inter-ministerial panel.
The government came in with regulations as an irrational spike in outbound shipments of the commodity in recent weeks has threatened to undermine its ban on wheat dispatches.
Wheat flour exports witnessed a sudden and unusual surge in the aftermath of the ban on the outbound shipment of wheat on May 13, indicating that many traders might be using this route to beat the prohibition on the grain’s exports.
Usually, monthly exports at this time of the year are about 6,000-8,000 tonne. However, flour dispatches exceeded 1 lakh tonne within a month of the ban on wheat, according to industry sources. To be sure, flour exports were neither banned nor restricted when wheat shipments were prohibited in May.
In value terms, exports of wheat or meslin flour jumped 64% last fiscal from a year before to $247 million, according to the DGCIS data. In contrast, wheat exports had jumped 274% in FY22 to $2.12 billion.