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Great Indian wheat export mystery: Turkey didn’t reject for quality, Israel bought it, ITC says

New Delhi: What really happened to a large wheat export consignment from India that business conglomerate ITC Ltd had shipped out mid-May?

Why did Turkey reject it? Did Egypt reject it too? How can wheat be contaminated by the rubella virus, which infects humans?

Is this ship loitering in international waters looking for a buyer? Or is this all just a grand global commodities trade conspiracy at a time the world is grappling with food inflation and grain shortages?

The answer to the last question may not be known for a while, if at all, but Rajnikant Rai, CEO of ITC’s agribusiness division, set the record straight on the rest, rubbishing claims that the shipment fell short of the contracted quality parameters.

The 55,000-tonne consignment was sold to a Dutch firm named ETG Commodities, which appointed a Swiss company, SGS, for quality tests, Rai told ThePrint in an exclusive interview.

“ITC delivered the contracted quality and the ship sailed mid-May. We later came to know that ETG sold it to a Turkish buyer. End May, we learnt, the shipment was rejected by Turkey,” Rai said. Both ITC and ETG have received payment for the deal, he added.

“But neither us nor ETG ever received any report on the reason for rejection. To say that the wheat was rejected due to the presence of rubella virus or it had lower than required protein content, and that after Turkey, Egypt, too, rejected it, are just rumors,” he said.

“The ship never sailed to Egypt and now it is berthing at a port in Israel waiting to be unloaded,” Rai added, indicating that a new buyer had been found for the consignment.

According to an official with an international commodity trading firm who wished to not be named, there could be “commercial or geopolitical reasons at play here”. “Raising quality concerns looks like an attempt to tarnish India’s reputation as a global grains supplier,” the official said.

A handful of traders from Europe dominate and control the wheat trade in the Middle East and African markets, said S. Chandrasekaran, a New Delhi-based trade analyst, adding that the Indian wheat consignment being infected by the Rubella virus is “a myth created by Turkey”.


Also read: From tomatoes to wheat, Indian crop forecasting is in the grip of a Raja Todar Mal problem


Navigating the global wheat market

According to Rai, ITC exported about 1.8 million tonnes of wheat in 2021-22, and shipped 1.3 million tonnes of wheat in April and May this year.

“But not a single consignment ever faced any problem. What was sent to Turkey was top-quality durum wheat sourced from Madhya Pradesh with protein content close to 14 per cent.”

Rai added that the rubella virus is not part of wheat contract specifications anywhere in the world.

India faced heavy criticism internationally after it banned wheat exports on 13 May to stem the surge in domestic food prices. International wheat prices were 56 per cent higher year-on-year in May, according to the United Nations’ Food and Agriculture Organization. Global food prices have been on a rise following Russia’s invasion of Ukraine.

India, which contributes about 40 per cent in volume-terms to the global rice trade, has so far been a marginal player in wheat trade. However, the current crisis provided an opportunity for India to emerge as a serious player in wheat and position itself as a dominant food exporter.

Trade analyst Chandrasekaran said “rubella is a myth created by Turkey”.

“It is now attempting to control the global wheat trade by facilitating grains stuck at the Odessa port in Ukraine. If ongoing talks between Ukraine, Russia and Turkey succeed, large quantities of wheat stuck in Ukraine may hit global markets in a controlled manner,” he added.

“So, Turkey sees no reason to allow Indian wheat [in the market]. By rejecting Indian wheat, it is trying to send a signal to the market that large supplies are going to hit soon and Turkey will be in charge of the logistics. In the process, India, perhaps is becoming a victim of powerful trade lobbies and global geopolitics.”

(Edited by Zinnia Ray Chaudhuri)


Also read: How food prices play out in India this year will depend on global inflation and local rains



Source: The Print

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