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India to send trade delegations to 9 countries to boost wheat exports

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Government plans to push wheat exports, even as domestic prices reach decadal highs, raising retail prices of Atta as well.Govt To Send Trade Delegations To 9 Nations For To Boost Wheat Exports - BW  Businessworld

India will soon be sending trade delegations to at least nine wheat importing nations to explore the possibilities of boosting wheat exports. The move comes amid widespread loss of yield in major wheat growing states, and low response to public procurement by farmers who continue to sell at much higher prices to traders.

The Centre will send trade delegations to Morocco, Tunisia, Indonesia, Philippines, Thailand, Vietnam, Turkey, Algeria, and Lebanon to promote Indian wheat, the Commerce and Industry Ministry said on May 12.

The move is part of the government's efforts to export 10 million tonnes of wheat in 2022-23, amid rising global demand, it said. Not more than 10 days after the Ukraine crisis began, the Centre began discussions with various countries, including Egypt, Turkey, China, Bosnia, Sudan, Nigeria and Iran on commencing wheat exports. Initial shipments have also begun to some of these nations.

The Agricultural and Processed Food Products Export Development Authority (APEDA), under the Commerce & Industry Ministry, has also planned to organize a series of sensitization meetings on exports in major wheat-growing states such as Punjab, Haryana, Madhya Pradesh, Uttar Pradesh and Rajasthan, it said.

APEDA has set up a task force on wheat exports that include officials from various ministries such as Shipping and railways, and exporters. APEDA officials said that Indian farmers, traders and exporters have been advised to follow all the quality norms of importing countries so that India emerges as a reliable supplier of wheat globally.

Exports moving ahead

According to estimates by the Directorate General of Foreign Trade (DGFT), India has exported a record seven million tonne (MT) of wheat in 2021-22, which is valued at $2.05 billion. Out of the total shipment, around 50 percent of wheat was exported to Bangladesh in the last fiscal.

Recently, Egypt, which is one of the world’s biggest importers of wheat, had agreed to source wheat from India. Egyptian authorities have now allowed India into the list of accredited countries which can export wheat to the country. Egypt imported 6.1 MT of wheat in 2021, of which 80 percent were from Russia and Ukraine.

APEDA has already communicated to exporters to register with Egypt’s public procurement agency – General Authority of Supplies and Commodities, which manages wheat and sugar imports to the north African country.

In April, domestic wholesale wheat prices rose to a decadal high. Prices have risen by 5-7 percent in March and April. However, they are yet to catch up with the export prices, which remain at record highs.

Slow procurement

Currently, farmers are not willing to sell to the government since the procurement prices being offered by private traders and exporters are much higher, multiple traders in the wheat exporting hub of Ahmedabad said.

Last week, the government revised its wheat production estimate for the 2021-22 crop year (July 2021-June 2022) downwards by 5.7 percent. National production is now estimated to be 105 million tonnes, down from 111.5 million tonnes.

As a result of heatwave conditions in March, both the quality and weight of output suffered in Punjab, Haryana, Madhya Pradesh and Uttar Pradesh. These states have reported a fall in yield by up to 15 percent as sudden changes in temperature and climatic conditions have led to the grains shrivelling.

For the ongoing 2021-22 crop year, the government had last year hiked the minimum support price (MSP) for wheat by Rs 40 to Rs 2,015 per quintal. The MSP, however, is way lower than the going rate of Rs 2,400-2,500 per quintal as of February 11 at most major wholesale markets across the country.

As a result of this and the flurry of exports, the procurement target for the 2022-23 wheat marketing year (April-March) has also fallen to 19.5 million tonnes, down from the earlier target of 44 million tonnes. As of May 8, procurement by the Food Corporation of India (FCI) and other government agencies stood at 17.5 million tonnes.

Food Corporation of India (FCI) data show that the combined stockpile of wheat had risen to a record 603 lakh tonnes in July 2021. The level currently stands at 303 lakh tonnes, data shows.

Ford drops plan to manufacture EVs in India; opts out of PLI scheme

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Company communicates to the government that it no longer intends to invest in the country under the PLI scheme


American automaker  on Thursday said that it has withdrawn plans to manufacture  in India. The company has also communicated to the government that it no longer intends to invest in the country under the Performance Linked Incentive (PLI) scheme.

“After careful review, we have decided to no longer pursue EV manufacturing for exports from any of the Indian plants. We remain grateful to the government for approving our proposal under the Production-Linked Incentives and for being supportive while we continued our exploration.  India’s previously announced business restructuring continues as planned, including exploring other alternatives for our manufacturing facilities. We continue to work closely with unions and other stakeholders to deliver an equitable and balanced plan to mitigate the impacts of restructuring,” the company said in a statement.

Ford’s application was selected under India’s . It was among the 20 other automakers that the Ministry of Heavy Industries had shortlisted under its Champion OEM scheme. The centre is giving incentives worth Rs 45,016 crore to attract automakers to increase their manufacturing in India.

At that time, the company said that it was exploring the possibility of using one of its plants in India to produce electric cars for exports.

In February, the Centre announced that the American automaker was among those entities which qualified for its PLI (production linked incentive scheme) where the core objective is self-reliance. In Ford’s case, it was made amply clear that this meant production of  and components for overseas markets.

Last year, the company said that it will stop manufacturing vehicles in India but retain the engine-making and technology services business (Global Business Services) as part of restructuring its India operations. This move is expected to affect nearly 4,000 workers.

The move was prompted by the mounting losses and slowdown in India’s passenger vehicle market, made worse by the Covid-19 pandemic.

 had been rethinking its India operations even before it had initiated discussion with Mahindra & Mahindra in 2019. It decided to cease manufacturing after considering all options, including contract manufacturing, he added.

It is the fourth US automaker to shrink India operations -- after Harley Davidson, UM Motorcycle, and General Motors -- in less than five years amid poor sales, high operating losses, high fixed costs, and a market that has failed to live up to the parent company’s expectations.

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RBI's forex reserves formidable, but futile to resist global tide against currencies, says source

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The RBI has used its 'formidable' foreign exchange reserves to prevent the rupee from weakening sharply in recent days. However, mounting a defence against what a person aware of developments called 'a global tide' is seen as being futile

RBI's forex reserves formidable, but futile to resist global tide against  currencies, says source

The Reserve Bank of India (RBI) sees the current depreciation of the rupee as part of a "broader trend" and thinks it will be "futile" to defend the Indian currency against a "global tide", according to a person familiar with the central bank's thinking.

"There are certain factors, like global spillovers, which the RBI can do very little about. India is a price-taking country. It will be futile if the RBI tries to resist a global tide," the person said, requesting anonymity. "But if there are country-specific factors, then the RBI has formidable reserves."

The comments come after the Indian currency weakened to an all-time low against the dollar on May 9, with the US Federal Reserve having raised the federal funds rate target range by 50 basis points last week. In response, yield on the 10-year US government bond crossed 3 percent on May 5.

"There is a 'fly home' bias now," the person noted, commenting on the outflow of foreign capital from certain countries.

The RBI has been actively intervening in the foreign exchange market in recent days to reduce volatility in the rupee's exchange rate. As always, the central bank has no specific level for the exchange rate in mind and is more concerned with intra-day movements being limited to a "certain number of paise", the person quoted above said.The RBI's foreign exchange reserves have declined in recent weeks to $597.73 billion as on April 29. According to the person quoted above, the fall in the reserves was not because of the RBI's actions in the foreign exchange market but due to the valuation losses of the central bank's non-dollar assets. he RBI's foreign exchange reserves are held in assets denominated in various currencies. While the US dollar is the largest component, its appreciation against these other currencies - such as the euro, the yen, or British pound - means a fall in the value of these currencies in dollar terms and consequently a decline in the RBI's foreign exchange reserves, which are measured in dollars. 

According to the source's information, data on RBI's foreign exchange reserves scheduled for release on May 13 will likely show another fall in the reserves before posting a rise in next week's publication.

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