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Source: The post is based on the article “Cabinet approves amendment to export policy for Wheat or Meslin Flour” published in PIB on 25th August 2022.
What is the News?
The Union Cabinet has approved changes in the policy of exports of wheat and has removed the exemptions on Wheat or Meslin Flour from export restrictions or ban.
This will now allow the government to put a restriction on the export of Wheat Flour which will ensure a curb on the rising prices of wheat flour.
What is Wheat or Meslin Flour?
Meslin Flour is a wheat and rye blend that is sown and harvested together. It is typically traded alongside wheat.
Why is the government planning to put a restriction on the export of Wheat Flour?
Russia & Ukraine are the major exporters of wheat accounting for around 1/4th of the global wheat trade. The conflict between them led to the global wheat supply chain disruptions increasing the demand for Indian wheat.
As a result, the price of wheat in the domestic market showed an increase. In order to ensure food security for 1.4 billion people in the country, the decision was taken to put a prohibition on the export of wheat in May 2022.
However, due to the prohibition on the export of wheat (which was done to put a check on increasing prices in the domestic market and to ensure food security in the country), the demand for wheat flour has increased in foreign markets and its exports from India have registered a growth of 200% during April-July 2022 compared to the corresponding period in 2021.
The increased demand for wheat flour in the international market led to a significant price rise of wheat flour in the domestic market. Hence, the government has decided to put a restriction on the export of wheat.