India signs contracts to export about 500,000 tons of wheat

India has signed contracts to export about 500,000 tonnes of wheat in recent days, traders said, cashing in on a sharp rally in international prices and signalling a big uptick in overseas sales from the world’s second biggest producer of the grain, Reuters reported.

Traders said last week they had received inquiries from buyers seeking alternatives to Black Sea cargoes as Russia’s invasion of Ukraine threatened supplies from two producers which together account for 30% of world wheat exports.

After five consecutive record annual crops, India has large wheat inventories, and traders are keen to capitalize on any export opportunity.

A high domestic price guaranteed by the government tends to deter exports unless world prices are high.

“The surge in global prices has made it easier for Indian suppliers to meet the rising demand for wheat,” said one dealer at a global trading firm, declining to be named because of company policy.

India guarantees producers about $257 a tonne for domestic sales, while benchmark European wheat jumped above €400 ($435) on Monday and benchmark wheat prices in Chicago settled at their highest in 14 years.

India is set to export a record 7 million tonnes of wheat this year.

“The buyers, who are worried about supply disruptions from Ukraine and Russia, know that only India can be a big, steady supplier of wheat at this point of time, and that’s why they have turned to India,” the dealer said.

India has sealed deals to export about 500,000 tons of wheat in recent days, he said. Two other traders, who also did not wish to be named, confirmed the figure.

“Most suppliers have signed these deals at around $340 a tonne free on board (FOB) to $350 a ton,” said trader Rajesh Paharia Jain at Unicorp.

Traders earlier sold wheat at $305 to $310 a tonne FOB.

An Indian government official, who declined to be named, said New Delhi was “supportive of wheat exports and will facilitate” shipments by private players.