Stock - Wheat
The Ukraine crisis has upended global wheat supplies, and India's ban on exports of this staple adds another level of complexity. Image Credit: Bloomberg

Dubai: The UAE – and Saudi Arabia – have been assured of sufficient wheat exports from India despite the ban the latter had placed on all shipments of the food staple, thus offering much relief to consumers and retailers here.

“The two big entities in the UAE handling imports of wheat from India have given reassurances of steady supplies – and that’s all we wanted to hear,” said a top official at one of the leading foodstuff retailers in the UAE. “It would have been a significant blow if we had to look elsewhere to make up for the loss in supplies from India.”

India’s decision on banning exports of wheat came as part of its need to secure food supplies for its own domestic requirements. Wheat prices globally had shot up after the launch of hostilities in Ukraine, which had been among the top producers and suppliers of wheat to the world market. Other food and beverage essentials too have been seeing price inflation from a variety of factors, including the disruptions to supply chains.

This is when India took the decision to halt wheat exports – but with certain provisos in place. According to Sudhakar Tomar, President of India Middle India East Agro Trade Industry & Investment Forum. “The Indian government stated that wheat exports will still be authorised on a selective basis to address the food security needs of friendly nations depending on their governments' requests. These governments can register their requirements with the Indian authorities as soon as possible to keep the supply chain open.

“When it comes to Asia and the Middle East, apart from India and Australia, most countries rely on imported wheat and are vulnerable to rising global wheat prices, even if they do not import directly from India.”

It will be imperative for authorities in wheat importing nations to register their requirements with India as soon as possible to keep the supply chain diversified

- Sudhakar Tomar of India Middle India East Agro Trade Industry & Investment Forum

Russia, Ukraine hold the key

Global wheat prices rocketed following the Russia-Ukraine war, with these countries accounting for more than 25 per cent of global wheat exports. The India government ‘defended its decision to ban exports to protect domestic food security due to reduced wheat crop size, lower than usual procurement of wheat under central government programmes and high fertiliser costs,” according to Tomar.

Gulf’s food retailers still have issues

While market sources confirm that wheat exports from India to the UAE and Saudi Arabia will happen, foodstuff and supermarket retailers with a presence in the other Gulf markets face a problem. Will India open the supply channels to the other Gulf markets?

“India exported around 187,949.46 tonnes of whole wheat to UAE in 2020-21,” said Dr. Dhananjay Datar, Chairman and Managing Director of Al Adil Trading, the specialty retailer of Indian food commodities and spices. “When it comes to exports of whole wheat, UAE is third after Bangladesh and Nepal. I would say the issue of wheat supply from India is yet to be sorted out. We are awaiting the latest notifications.” (Apart from its extensive UAE presence, Al Adil Trading has locations in some of the other Gulf markets.)

I would say the issue of wheat supply from India is yet to be sorted out. We are awaiting the latest notifications

- Dr. Dhananjay Datar of Al Adil Trading

UAE F&B businesses have a lot to chew on

Tapan Vaidya, CEO of the pizza chain Papa John’s UAE, has a lot playing on his mind. “The Ukraine situation has affected wheat prices globally, inflating it up to 30 per cent and more. We have so far insulated ourselves from this increase via supply agreements that were in place - but it is unclear how far we will keep this situation under control.”

The pizza chain sources the flour from a ‘strategic supplier’ with access to sources in Canada, Australia, Eastern Europe and India.

The Ukraine situation has affected wheat prices globally inflating it to 30% and more - we have insulated ourselves so far...

- Tapan Vaidya of Papa John's UAE

Adjusting to inflation

It is not just wheat that F&B operators have on their minds. “The UAE is facing its highest inflation since September 2018,” said Sanjay Vazirani, CEO of Foodlink Global Restaurants & Catering Services. “While a lucrative market for restauranteurs, it is also very competitive. We have to keep coming up with new ideas and promotions to stay competitive. Customer diversity makes it more difficult to predict what will work and what won’t. All these factors impact profit margins.”

The coming days will show how much of a factor the ban by India on wheat exports will be taken by consumers and F&B businesses elsewhere in the Gulf.

Supply chains we had been accustomed to over years are facing disruptions, which is pushing the F&B industry to focus on being its most efficient in finding quick alternatives. Raw material prices have been increasing, month on month, which is pushing all of us to work at our leanest to ensure customers get better value at our restaurants

- Rohith Muralaya, Director, SFC Group