Explained: What UAE’s suspension on exports of Indian wheat for four months means

The United Arab Emirates (UAE) has ordered a suspension of the export and re-export of wheat and wheat flour originating from India. This will not allow Indian wheat to be used for any other purposes other than domestic consumption in the Gulf nation. The four-month ban came into force on 13 May. The UAE’s Ministry of Economy has called the restriction ‘moratorium’, which has been put into place because of “the international developments that have affected trade”. Also read: Explained: How criticism of India’s wheat ban export isn’t accurate But how is UAE still getting Indian wheat after the ban? India banned wheat exports on 14 May, but it did not extend to those backed by already issued Letters of Credit (LIC) and countries struggling with food security. The UAE falls under the first category. The ban was to curb high prices amid concerns that the extreme heatwave had affected crop output. While imposing it, India had stated that another reason for the restrictions was to stop Indian wheat from getting hoarded and further traded in a country for which it was not meant to be. Where does the UAE re-export wheat? “India doesn’t want its wheat exported to Dubai or Abu Dhabi to go out to other countries, whether as grain or flour. It would want that wheat to be consumed locally, including the migrant Indian workers in UAE,” trade sources told The Indian Express . The UAE is a major hub for re-exports. It resells wheat to Saudi Arabia, Bahrain, Jordan, Ethiopia, Taiwan and the Philippines. Such exports amount to about one lakh tonne every year, according to reports. What has the UAE said? UAE has said that companies wishing to export or re-export Indian wheat brought into the UAE before 13 May must first make an application to the economy ministry, according to a report in the news agency Reuters . How much does the UAE depend on India for wheat? Since the wheat ban, 469,202 tonnes of wheat have been shipped to the UAE. In 2021-2022, India exported 4.71 lakh tonnes of wheat to the country, which entirely depends on imports for consumption. According to the United States Department of Agriculture, UAE’s annual wheat consumption is 15 lakh tonnes. Where does it get the rest of the supplies? More than 50 per cent of the imports are from Russia, Canada, Ukraine, and Australia. Because of the ongoing Russia-Ukraine war, supplies have been hit across the world. Can India take advantage of this? The UAE and India signed a broad trade and investment pact in February that seeks to cut all tariffs on each other’s goods and aims to increase their annual trade to $100 billion within five years, reports Reuters. The pact, known as the Comprehensive Economic Partnership Trade Agreement (CEPA), took effect on May 1. India, however, has a few domestic constraints in the agricultural sector. First, damage due to unseasonal weather conditions affects crop yield, thereby restricting supplies, as we have seen this year. This, in turn, tends to raise domestic prices. Second, countries opt for long-term essential food relationships. For India to take advantage of the opportunity, it will have to ensure adequate supplies at home. Frequent export restrictions don’t encourage other countries to depend on another for essential commodities such as food. However, from 2020-2021, India emerged as a key supplier, exporting 1.88 lakh tonnes of wheat to the Gulf federation, reports The Indian Express. With inputs from agencies

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