India Holds Wheat Export Window Open Amid Monsoon Uncertainty
India's wheat export policy has changed twice in recent years, and it's not hard to see why. With production estimated at 120.7 MMT, procurement reaching 35.76 MMT, and central pool stocks standing at nearly 48 MMT, the country appears to have a comfortable surplus.
However, the situation is not as straightforward as it seems. The crop that will replenish these stocks has yet to be sown, and there are reasons for caution. The monsoon is about 15% below normal, with parts of the wheat belt facing large rainfall deficits and uneven risks across different regions.
According to NOAA's September 14 update, El Niño will continue through January-March 2027, increasing the chances of below-normal rain and above-normal temperatures over parts of India. This warmer winter could effectively shorten the grain-filling period in March, which is crucial for wheat yields.
The risk is not limited to wheat alone; rice prices are already 7-8% higher than last year, and kharif acreage has dropped by nearly 17 lakh hectares. If India's cereal basket has less room to absorb a wheat shock than the headline stocks suggest, it would be wise for policymakers to exercise caution.
Despite this, the incentive to export remains real. Black Sea wheat lands at Chittagong for about $380/mt, compared to roughly $330/mt for Indian wheat based on Rs 27/kg in Madhya Pradesh. Forward markets also point to firmer prices, with May 2027 Chicago wheat and Kansas HRW around 15% above May 2026 levels.
India has seen how quickly calculations can change. In February 2022, production was estimated at a record 111.3 MMT, but by May 12, the government was announcing trade delegations to promote wheat exports. A day later, exports were prohibited, and on May 19, the production estimate was cut to 106.4 MMT.
Given these swings, it's essential for India to retain room to respond. Keeping a calibrated wheat export window and revisiting it as information improves would allow the country to adapt to changing circumstances without sacrificing its reliability as a supplier.