India can allow wheat exports to meet the demands of Indonesian food seeds through an arrangement in which Southeast Asian countries supply palm oil without interference at a competitive level to overcome Indian concerns over the edible lack of oil, one of the main factors that turn on inflation, two people Knowing this problem, asking not to be named.
Although India has banned the export of wheat last month to ensure adequate availability in the country even when the price of global wheat has skyrocketed because of supply problems, it has made the export option open despite the government-to-government agreement (G2G), both added.
India imposed a prohibition on wheat exports on May 13 “with a direct effect”. Indonesia’s prohibition on exports of palm oil on April 28 lasted for three weeks. Palm oil, inexpensive when compared to other edible oils, is a cooking medium that is preferred in India. In 2020-21, India imported 133.5 edible oil tons of oil, where the share of palm oil was around 56%.
While again allowing exports on May 23 in the midst of domestic protests, Jakarta has now placed some protection, and there is no guarantee that the prohibition will not return, they said.
Indonesia is interested in importing Indian wheat, which is only possible through the G2G agreement according to the Directorate General of Foreign Trade (DGFT) on May 13, one of two people said.
Jakarta’s prohibition on exports of palm oil (Indonesia contributed about one third of all exports of vegetable oil) which greatly influenced Bangladesh, Pakistan, and India which resulted in a significant increase in oil prices, added the second person.
“Although Indonesia has ease the export of palm oil, the G2G agreement can ensure that there will be no sudden disruption in the supply of oil that can be eaten to India even in the future. It also can ensure a competitive level, “explained this person.
“The top priority of the government is to ensure the supply of important and adequate food goods such as oil that can be eaten to calm inflation,” said the first person.
The people quoted above and experts say India is very dependent on the imported oil imports and must get profitable supply contact with Indonesia because the global geopolitical situation is uncertain and the Ukraine War can extend to increase further food prices.
Indian retail inflation jumped to the highest of 95 months at 7.8% in April, which is far above the level of tolerance for the official RBI of 6% for the fourth monthly month. For May, the headline number entered 7.04%.
“The recent steps taken by GOI (free imports of 2 million tons of each soybean oil and sunflower oil for two years) and Indonesia’s decision to lift the export ban of palm oil is expected to cool the price of goods in the short term. However, persistent geopolitical development and high import dependence in India can prevent considerable correction in the price of edible oil, “ICRA reports on retail inflation outlook on Friday.
Ministry of Trade, Consumer, Food & Public Distribution Affairs does not respond to email questions.
