Export ban will have no impact on inflation: Ajay Kedia

If international wheat prices continue to be high, a trickle-down effect may be seen in India. The wheat yield may fall by up to 10% if heatwaves do not abate, Ajay Kedia, director of Kedia Commodity, tells DH’s Annapurna Singh.

Has India’s credibility in the global market taking a hit due to the wheat export ban?

No doubt, some voices against the ban were heard, but later we also saw countries like China supporting India’s move. We must remember that it is a pandemic period. At this juncture, it is important to first protect our own country. Secondly, India has not completely banned the export of wheat. We will honour our prior commitments. But in the current global scenario, the government has done well to go by the “our-own-safety-first” policy. For example, Indonesia also banned the export of cooking oil, but took steps to open up when things started to cool off.

Will the wheat export ban have any impact on inflation?

No, there will not be any impact on inflation. There are other factors, which are helping ignite inflation. Energy and edible oil are bigger drivers as of now. Wheat is impacting more in European countries. In India or most other countries, energy inflation is the worst. Prices of other commodities are also ruling high. So, it is not only about wheat. It is more about other commodities.

What will be the impact on wheat prices going forward post the ban?

There is a shortage of wheat in the global market due to which prices are moving upward. Price may go up to $12-$13 bushel also in the coming time. But in the domestic market, not much difference in the prices will happen. Secondly, post Covid-19 wheat demand has also gone up. So a marginal rise in prices will be there. But in the next six months, there will be pressure on prices even domestically. That will be due to the impact of global rise in prices. Also, if the heatwave continues, it will impact the yield. So, the monsoon this year will play a major role. Though predictions so far are of normal monsoon, it will be important to watch what will be its distribution till September. The timely withdrawal of rains, that is in the last week of September, provides ideal planting conditions for wheat.

What is your estimate about wheat output?

The early onset of summer raises concerns about terminal heat stress to the crop during milking or grain filling stages. It can potentially lower yields up to 10% in the late-planted wheat (November-December) in central India.