Indian Market: When France’s Pain Is Ukraine’s Gain

India has received wheat from an East European country for the first time in a decade, with Ukraine snatching the French wheat markets with shipments to the South Asian nation.
As France failed to export wheat to India due to floods this year, Ukraine took advantage of the situation and sent 240,000 metric tonnes of wheat to the second-largest consumer of cereal grain. The Indian Ministry of Agriculture and Farmers Welfare has confirmed the news, saying in a statement that New Delhi received 240,000 metric tonnes of wheat from the former Soviet republic in July and August. The ministry thanked Kiev for exporting the huge amount of wheat at a time when stocks in the South Asian country fell to a nine-year low. The Indian ministry also said that the Narendra Modi government decided to waive a 25% import duty due to a wheat shortage for 2016-17. The proposed move means that India will become a net wheat importer for the first time in six years.
Meanwhile, Kiev-based consulting agency UkrAgroConsult has stressed that Ukraine will try hard to capture the Indian agricultural market in the coming years. In its latest report, UkrAgroConsult said that Kiev got an opportunity to boost trade ties with New Delhi after floods drove soft-wheat yields in France to the lowest since the early 1980s. The report added: “Traditionally, India imports wheat mostly from France and Australia. Given the wheat production decrease in France in the current season and quality problems, Ukrainian exporters have got a great chance to take its place on this market.”
According to the report published by UkrAgroConsult earlier this week, a 31% decrease in agricultural production prompted the French Agriculture Ministry to cut its estimate of soft-wheat output for a second time on Monday. Last year, France produced 28.2 million tonnes of wheat.
For Ukraine, it has become easier to supply wheat to India as prices of French wheat are higher than Ukrainian. “If export prices for French milling wheat are usually comparable with Ukrainian, then now French wheat prices are USD 18-20 a tonne higher. Only Russia can compete with Ukraine,” stressed UkrAgroConsult.
It is to be noted that the Ukrainian consulting agency published the report a couple of days after India announced that it would send senior ministers to East European countries in near future as a part of the Modi government’s massive outreach programme to boost bilateral ties and explore new areas of co-operation.


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