Wheat importers face a threat to delivering politically sensitive bread supplies across the Middle East and North Africa (MENA) after Russia's invasion of Ukraine closed off access to the lower priced Black Sea grain they depend on.

 

The ensuing conflict has halted shipping from Ukraine's ports, while financial sanctions have put payments for purchases of Russian wheat in doubt, traders and bankers say, adding another to the risk for governments in the MENA region already struggling with import costs, economic crises or conflict.

 

'Everyone is looking for other markets as it's becoming increasingly impossible to buy stocks from Ukraine or Russia,' a Middle Eastern commodities banker said, citing disruption to shipping, escalating sanctions and rising insurance premiums.

 

'The market is not expecting Ukrainian and Russian exports to resume until the fighting ends,' one trader said.

 

Soaring global prices and possible export restrictions make switching to alternative origins costly, while options for expanding local production in the MENA region are limited by water scarcity and rising input costs.

 

While Gulf countries are protected by fiscal surpluses, other MENA countries, including Egypt and Lebanon, 'remain some of the most vulnerable globally, given the dependence on wheat imports and high household spending on food', Monica Malik, chief economist at Abu Dhabi Commercial Bank, said.

 

Egypt, often the world's largest importer, bought 80% of its wheat from Russia and Ukraine last year, traders said.

 

But since Russia's invasion of Ukraine its state grains buyer has cancelled two tenders due to a lack of offers and high prices, while two cargoes are stuck at Ukrainian ports. read more

 

Egyptian officials say wheat reserves and the upcoming local harvest are enough to provide subsidised bread for around nine months. But they are already expecting to pay up to an additional $950 million in the current budget due to higher prices and could see an erosion of strategic reserves.

 

Egypt's commercial bread market could be at greater risk due to lower stocks, traders said. Prices of local wheat and flour have risen 23% and 44% respectively since the Russian invasion began, Ezzat Aziz of the Cairo Chamber of Commerce said.

 

Algeria, another major buyer, says it has enough grain reserves to last until the end of the year but is readmitting French wheat imports, suspended after a row over France's colonial role in the North African country.

 

'HUNGER'

 

Russia and Ukraine account for about 29% of global wheat exports. But with their supplies in doubt, Chicago wheat futures rose to a 14-year high on Monday.

 

'Importers will have to pay on average 40% more for wheat than before the invasion,' a second trader said.

 

And while Algeria, Libya and oil producers in the Gulf may find higher wheat import costs offset by rising hydrocarbon revenues, other governments have no such cushion.

 

In Lebanon, which is suffering one of the worst economic crises in modern history, wheat reserves stood at just one month as Russia invaded Ukraine. read more

 

In Tunisia, reduced bread stocks, rationing of flour in shops and problems docking wheat imports have raised doubts about official claims that there is enough supply to last until the summer.

 

Meanwhile, Morocco is set to hike grain imports after its worst drought in decades. read more

 

In Syria, whose economy has suffered from years of conflict, a source familiar with the matter said the government could lean on reserves but acknowledged that costs would increase.

 

Poverty and humanitarian needs are deepening. read more

 

'There is local wheat, they will try to produce more but there is a problem of course. Some people won't be able to eat, there will be hunger,' said a Syria-based trader.

 

And there are signs some European countries may limit grain exports after Hungary on Friday announced an immediate export ban, while Bulgaria plans to buy wheat for its reserves, which producers fear may herald such a move.

 

Romania has said it sees no need to restrict exports for now.

 

'The challenging part is countries like Egypt, Morocco or Lebanon who have the double whammy of Black Sea imports (ceasing), and higher prices,' Ahmed Morsy, senior analyst at U.S-based Eurasia Group, said.

The Odisha government is aiming at boosting exports of non-Basmati aromatic rice to open new avenues of income for paddy farmers, an official release said on Monday. The government is focusing on exports due to the paddy production potential of the state's agro-climatic zones, existence of huge genetic diversity of aromatic rice germplasm, traditional skill of farmers and availability of port facilities, the release said. Chief Secretary Suresh Chandra Mahapatra held a virtual session recently with the stakeholders on the subject. "As a rice-surplus state, Odisha has availability for exports,'Asit Tripathy, principal adviser to the chief minister, said. There are also rice aggregators in Odisha who can be trained and mobilised for export-oriented operations, Tripathy added. Ground-level workshops should be held with rice aggregators, food exporters and farmer-producer organisations to infuse confidence in the community for production of export-quality paddy, Tripathy said.

 

Cluster approach should be adopted in the promotion of cultivation of non-Basmati aromatic varieties of paddy. Agro-climatic zones, which are more suitable for cultivation of such varieties, should be identified, he said. "The Odisha government is committed to enhance farmers' income by boosting exports of non-Basmati aromatic rice and the state will provide all possible support for the purpose,'Mohapatra said. He asked the Agriculture Department to constitute a resource team which will visit Andhra Pradesh for gaining exposure of the methods adopted for exporting non-Basmati aromatic varieties. There were also discussions on requirements such as laboratory network in Odisha, rice warehouse at Paradip port, and awareness about Indian and global food practices among the farmers. 

The landmark Comprehensive Economic Partnership Agreement (CEPA) signed recently between India and the United Arab Emirates (UAE) is a major boost to bilateral relations and economic cooperation between the two nations.

 

One of the main aims of the CEPA is to increase bilateral non-oil merchandise trade to USD 100 billion in the next five years. The CEPA will encourage bilateral investments with gains in labour-intensive industries like Textiles, Gems and Jewellery, Leather Goods and Footwear, and Food Processing. Both nations stand to benefit from this agreement. A few of the significant benefits for India are as follows:

 

Access to markets in the MENA region: The CEPA is India's first bilateral trade agreement in the Middle East and North Africa (MENA) region. This agreement will ease similar agreements with the other Gulf Cooperation Council (GCC) countries - Saudi Arabia, Qatar, Kuwait, Oman, and Bahrain. It will provide better access to markets across the wider MENA region by leveraging the UAE’s transport and logistics infrastructure.

 

Boost to Indian exports: Under the CEPA, around 90% of the products exported and 80% of lines of trade from India and to the UAE will attract zero duty, a significant benefit for Indian exports facing increased competition. The zero-duty access for Indian products to the UAE is expected to expand over 5-10 years to 97 percent of UAE tariff lines, or 99% of Indian exports by value. The UAE is India’s third-largest trading partner and second-largest export destination. And India is the UAE’s second-largest trading partner and largest in terms of exports. The UAE-India CEPA will benefit around USD 26 billion of Indian products subject to 5% import duty by the UAE. As the UAE is a major global redistribution centre, especially with exports to Africa being routed through it, the CEPA will drive warehousing and distribution centres in the UAE for Indian exporters.

 

Investment flows: The CEPA is expected to accelerate FDI inflow from the UAE into India

 

Job creation for the Indian workforce: This agreement will create additional jobs and improve the working environment for the large Indian workforce working in the UAE. It is likely to generate one million jobs in various labour-intensive businesses.

 

Ease of doing Business: The CEPA provides for automatic registration and marketing authorisation of Indian generic medicines in 90 days upon their approval in developed countries. India has given duty concessions on gold import from the UAE while Indian jewellery exporters will have zero duty access to the UAE market - significant as their trade is 16% of the global diamonds, gold, and jewellery trade.

 

Comprehensive partnership in several areas

Cultural cooperation: The CEPA sets up the foundation of an India-UAE Cultural Council to promote cross-cultural exchanges, cultural projects, exhibitions, and dialogue between thought leaders.

Energy partnership: The UAE is one of India's key energy providers and has shown its commitment to meeting India's energy demand.

 

Climate action and renewables: Both nations will cooperate on the implementation of the Paris Agreement, working closely in the contexts of Conference of the Parties (COP), the International Renewable Energy Agency and the International Solar Alliance.

 

Hydrogen Taskforce: India and the UAE have agreed to establish a joint Hydrogen Taskforce to help scale up technologies, with a special focus on the production of Green Hydrogen.

Emerging technologies: The UAE and India shall expand cooperation and collaboration on critical technologies and mutually promote e-businesses and e-payment solutions.

Skills cooperation: Both nations agreed to work together to ensure that the UAE labour market skill needs from India are met through workforce access to training programs aligned to market needs and to address the changing needs for the future of work.

 

Food security: Both nations agreed to expand cooperation through enhanced bilateral food and agriculture trade and responsible foreign investments in agriculture and food systems.

Health cooperation: It was agreed to collaborate on the research, production, and development of reliable supply chains for vaccines and to enhance investments by UAE entities in the rapidly growing health infrastructure in India.

 

Education: Both countries agreed to establish world-class institutions to drive innovation and technological progress. The first-ever IIT overseas is to be set up in the UAE.

Cooperation in international affairs, and defence and security: The UAE and India agreed to support each other in international affairs, and in defence and security to maintain peace in the region.

 

Mechanisms to prevent treaty abuse

 

The CEPA has a permanent safeguard mechanism to resort to in case of sudden surges in imports, along with strict Country of Origin rules that will prevent products from other countries moving via the CEPA route. The UAE being a global transhipment centre, there is a greater risk of such treaty abuse; hence, rules of origin are to be strictly implemented.

 

The CEPA is a historic future-looking agreement that will benefit both India and the UAE in the long run in various ways. Both countries shall now aim for its proper implementation to maximize their gains and leverage upon the several promising opportunities for growth and expansion.

 

The Minister of Commerce and Industry, Consumer Affairs, Food and Public Distribution and Textiles, Shri Piyush Goyal today said India’s exports share in GDP should rise to at least 20%. Shri Goyal also said a strong Rupee will be good for exports.

 

'If we want to be a $5 Trillion economy, our exports of Goods and Services will have to a Trillion Dollars at least, - ideally 25%, but at the very least 20%! And why I said 25%, because we need to support our import of Oil. And therefore our exports will have to really go up by leaps and bounds so that we can continue to finance our imports and strengthen the Rupee in the days to come,' said Shri Goyal, delivering the keynote address to the ASSOCHAM Annual Sessionon 'The great Reset: Reinforcing India’s GlobalPositioning'.

 

'I personally am not of the old school of thought (or) one section of Industry or society or exporters which believe that a weak Rupee or a weak currency supports exports. I believe a strong currency reflects the strength of a nation and will always be good for exports, because India, at the end of the day, is a net importer of Goods. A strong currency supports the Indian economy,' said Shri Goyal, in his video conference address, throwing open the issue to wider debate.

 

Shri Goyal said he is hopeful India’s exports will touch $410 Billion in the current Financial Year.

 

'I am delighted that we are at $374 Bn until February, 2022, i.e. 11 months of this (financial) year. So I do believe that irrespective of problems that we have in the northern parts of Asia-Europe, we are well on track not only to achieve 400 ($400Bn), I am hoping closer to 410 (410Bn),' he said.

 

Shri Goyal called for the reorienting of economic laws to suit the changing needs of time.

 

'We will have to look at all of our traditional ways of working or doing business afresh,' he said.

 

'There comes a time in thedevelopment journey of every country when the countryredefines itself afresh & pushes forward with newresolutions. Today, that time has arrived in thedevelopment journey of India', said Shri Goyal, quoting Prime Minister Shri Narendra Modi.

 

Shri Goyal said the goal of 'AmritKaal' is to ascend to new heights ofprosperity for India and the 135 crore citizens of India.

 

'There is so much positivity in the world regarding theposition of India and this positivity is because of the hopesand dreams of 130 crore Indians. Today, sentiment has moved away from ‘Why India? to Why notIndia?’', he said.

 

Quoting PM Modi, Shri Goyal said, 'AmritKaal is of 25 years. But wecannot wait for that long to achieve our goals. Wehave to start now. We don't have a moment to lose'.

 

Stating that the COVID-19 has presented us with a unique opportunity toattract global manufacturing giants as companies lookto become resilient & diversify supply chains, Shri Goyal said we just need to leverage our ‘EDGE’ to give us an Edge inthe global competition:

 

?Economies of Scale

 

?Demographic Dividend

 

?Good Governance, &

 

?Encourage Innovation in Industry

 

Shri Goyal said the Government, through its various bold reforms, has provided anenabling ecosystem for India to make a mark in theGlobal Manufacturing landscape. He stressed that Quality and Productivity will be hallmarksof India’s future Manufacturing ecosystem.

 

Shri Goyal said the Government is identifying focus areas based on ourCompetitive advantage and Comparative advantage. Union budget 2022 has reinforced our commitment to anAatmanirbhar Bharat. A series of post-budget webinars are in progress,laying emphasis on different aspects likeAatmanirbharta in Defence, GatiShakti, Make in Indiafor the World, Energy for Sustainable Growth, etc.PM Modi is leading from the front by joining thesewebinars personally.

 

Shri Goyal gave a 3-point Call to Action for the Industry:

 

1. Explore various FTA provisions and use them to itsfull potential; take active part in existing negotiations, - FTAs are 2-way traffic; we have to be demanders &also accommodate their demands

 

2. Through actions, instil a feeling of pride in ourcitizens, that our products are at par or even betterthan global products. Make the difference visible!Gone are the days when imported meant better, 'Made in India' mark should compete with globalbrands in every category

 

3. Focus on development of Aspirational districts & Tier2 & 3 cities. These can be the future export hubs.

 

Shri Goyal said let all of us, - the Industry, Government& Citizens, work together toreinforce India’s position as a world leader by increasing India's share in Global Trade, raising share of Manufacturing in our GDP and aim to reach among the top 3 nations in Global Services Trade.

 

'Let us Make in India for the World,for which our collective effort (SabkaPrayas) is ofutmost importance,' he said.

Agriculture and education in skill development were mentioned at the second India-Japan Dialogue as areas of focus for India-Japan collaboration in the northeastern region.

 

Agriculture and education in skill development were mentioned at the second India-Japan Dialogue as areas of focus for India-Japan partnership in the northeastern region. 'Development of India's North Eastern Region and Neighbourhood' was the theme of the dialogue. 

 

Collaboration between India and Japan to Promote Entrepreneurship and People Connectivity'. It was held last week and was organised by a major think tank from the Northeast Asian Confluence in partnership with the Japanese Embassy in India. 

 

'The comprehensive collaboration between India and Japan provides the landlocked north-east with access to the Bay of Bengal and access to ASEAN countries, which plays a key role in unleashing enormous potential for growth and prosperity based on better access to the Indian Ocean, becomes crucial for the improvement of people's lives,' said Suzuki Satoshi, ambassador of Japan in India, in his inaugural address. 

 

In his introductory comments, M.P. Bezbaruah, former Member of the North Eastern Council and Chairman of the Governing Council of Asian Confluence, emphasised specific areas of collaboration. 

 

Smita Pant, Joint Secretary in the Ministry of External Affairs, highlighted all the activities happening in augmented services based on hard infrastructure connection initiatives that have already made headway in her special presentation. With its plentiful output and strategic position, NER has the potential to become a key participant in India's international commerce with its neighbours, notably in the agricultural sector, according to Pant. 

 

Market connections, cultivating qualified people resources, and guaranteeing security are all major elements in attracting Japanese companies to the region. 

 

Mr. Rajat Nag, a member of the Asian Confluence Governing Council and former Chairman of the Asian Development Bank, presided over a lively discussion. Specific product possibilities were considered, including buckwheat, bamboo, spices, shitake mushrooms, medicinal plants, skill development, language training courses, and collaboration with educational institutions. 

 

At the discussion, Kazuhide Sugimoto, a top mushroom producer, gave a presentation, as did K.N. Kumar, Chairman of the Meghalaya Farmers Commission, who spoke about special activities on Buckwheat in Meghalaya, and Mr. Kamesh Salam, who spoke about ongoing Bamboo projects. 

 

'The goal of this dialogue was to not only highlight and promote further narratives of cooperation, but also to matchmakers to forge concrete collaborations on specific products by connecting entrepreneurs and opinion leaders from Japan, India, and our Bangladeshi neighbours,' said Sabyasachi Dutta, ED of Asian Confluence. 

Commerce and industry minister Piyush Goyal on Monday said that India will clock around $410 billion of goods exports in FY22, higher than the $400 billion aimed despite the 'problems in the Northern part of Europe and Asia'.

 

With services exports likely to cross $250 billion, he said will be possibly for the first time that close to 25% of the nation’s gross domestic product (GDP) would come from overall exports.

 

'We’re at $374 billion of exports till February. Despite the problems in the Northern part of Europe and Asia, we are well on track not only to achieve $400 billion, I’m hoping closer to $410 billion,' Goyal said at an event organised by industry chamber Assocham.

 

The minister added that he has reset the target for services export twice during the year and despite travel, tourism and hospitality 'taking a knock, I won’t be surprised if we cross $250 billion'.

 

'So this will be a year of huge records, possibly for the first time, with we edging very close to 25% of the nation’s GDP coming out of exports both goods and services,' he said.

 

Goyal said that India has reduced or eliminated the compliance burden on almost 27,000 compliances at the centre and states.

 

He said if India wants to be a $5 trillion economy, the exports of goods and services will have to be a $1 trillion each.

 

'Ideally 25% but atleast 20%. I say 25% because we need to support our import of oil and therefore our exports will have to go up leaps and bounds so that we can continue to finance our imports and strengthen the rupee in days to come,' he said.

 

Noting that he is not of the old school of thought of one section of industy or exporters which believe that a weak rupee or a weak currency supports exports, Goyal said: 'I believe a strong currency reflects the strength of a nation and will always be good for exports because india is a net importer of goods. A strong currency supports the Indian economy'.

 

Goyal asked the industry to explore existing free trade agreements FTA or ones India is negotiating and see how they can be used at their full potential. The minister added that from Tuesday, the third round of negotiations with the United Kingdom for an FTA will start while talks with Australia are on.

Commerce minister Piyush Goyal and his Canadian counterpart Mary Ng will meet in New Delhi on Friday to begin talks for a free trade agreement (FTA) between the two countries, two people aware of the development said. The negotiations for a comprehensive economic partnership may also cover investment and services. However, India is looking for an early harvest or an interim trade deal before progressing with a full pact.

 

'India and Canada are set to launch FTA talks on Friday. We will go ahead with the same strategy as that with other developed countries of doing an early harvest deal first,' said a government official.

 

While Canada is looking at an investment protection agreement as part of the comprehensive deal, India is keen to discuss market access for agriculture, textiles, pharmaceuticals, and easing of technical and sanitary and phytosanitary barriers to trade.

 

'The India-Canada talks will officially be launched by the trade ministers in New Delhi,' one of the two officials cited above said on condition of anonymity.

 

The launch of trade talks comes in the backdrop of worsening geopolitical tensions following the Russian invasion of Ukraine, which has impacted global trade. Earlier in 2019, India had decided to opt out of the Regional Comprehensive Economic Partnership (RCEP) citing 'significant outstanding issues, which remain unresolved'. The domestic sector had argued that it could get hit due to cheaper alternatives from other countries.

 

The two sides had begun talks for a comprehensive economic partnership agreement in 2010, but it did not see much progress, although the negotiations went on till 2017. This time, the two sides may look at signing a mini trade deal or an early harvest deal, which keep the difficult and sensitive issues to be dealt with later as part of the full pact.

 

Canada is India’s 31st largest market, accounting for just $3 billion or 0.88% of India’s total outbound shipments in April-January 2021-22. Imports from the North American nation stood at $2.5 billion during this period, making up for 0.52% of India’s total inbound shipments. With imports worth $2.68 billion, and exports worth $2.9 billion in 2020-21, India had a small trade surplus of nearly $200 million with Canada.

 

Organic chemicals, pharmaceuticals, and apparel and textiles have been India’s top exports to Canada, with shipments worth $198 million and $261 million and $210 million in the April-January period of 2021-22. Iron and steel exports to Ottawa stood at $300 million.

 

Imports from Canada included vegetables and petro products of $343 million and $542 million respectively.

 

Mint had earlier reported that India is keen to have a strong services agreement under the proposed CEPA as Canada is not a large market for Indian goods. Besides, India is looking at generating more jobs for its teeming IT professionals, by facilitating easier work visas for Canada under the trade agreement.

Exports of major agriculture and processed products, broadly divided under 27 categories by Agricultural and Processed Food Products Export Development Authority (APEDA), have jumped 23.4 per cent to $19.7 billion during April-January of 2021-22 from $15.97 billion in the year-ago period, the Commerce Ministry said on Monday.

 

The APEDA-promoted products have nearly 50 per cent share in the country’s overall agricultural export of $41.25 billion (in 2020-21), whereas marine products came second with 14 per cent share, followed by spices with 10 per cent share.

 

A maiden export policy for the farm sector was announced in 2018 with the target to double the agricultural exports to $60 billion by 2022-23.

 

'We continue to focus on creating infrastructure for boosting exports by focusing on clusters in collaboration with state governments while taking into consideration the objective of Agriculture Export Policy, 2018,' said M Angamuthu, chairman of APEDA.

 

The Commerce Ministry has set a target of $23.71 billion for APEDA during 2021-22.

 

Chart-toppers

Export of rice was at top position with $7.7 billion (up 13 per cent) during the 11 months of this fiscal for which data have been released. Wheat shipments increased to $1.74 billion (up 387 per cent). Other cereals including maize registered a growth of 66 per cent to $869 million.

 

Meat, dairy and poultry products exports grew to $3.40 billion (over 13 per cent) and that of fresh fruits and vegetables were up 16 per cent to $1.20 billion. Shipments of processed fruits and vegetables were up by 11 per cent at $1.27 billion.

 

The Ministry also said that exports of cereal preparations and other processed food items grew by 14 per cent to $2.96 billion and that of cashew exports by 11 per cent to $383 million.

Prime Minister Narendra Modi will address a webinar on Tuesday on Budget 2022-23 with a focus on ways to accelerate the pace of growth, according to an official release.

 

To facilitate efficient and speedy implementation of budget announcements, the Government of India is holding a series of webinars across various key sectors, the Finance Ministry said in a statement on Sunday.

 

The objective is to brainstorm with experts from the public and the private sectors, academia and industry and identify strategies on how best to move forward towards implementation of various issues under different sectors, it said.

 

As part of this series, it said, post-budget webinar with title 'Financing for growth and aspirational economy' is being organised by the Finance Ministry on March 8.

 

'In participation at the highest level, Prime Minister Narendra Modi will deliver a special address during the inaugural session. The webinar involves participation from 16 ministries, NITI Aayog, Capacity Building Commission and State Governments.

 

'It will also include participation from regulators like RBI, SEBI, IFSCA, IRDAI, NABARD, GIFT City, Industry associations and subject Matter Experts/ Investor community,' it said.

 

The webinar will have five breakaway sessions on themes of financing of infrastructure; financing sectors with high employment potential; creating enablers of infrastructure; navigating the digital opportunity for banking and finance, and climate and sustainable finance and financing for sunrise sectors.

 

'Through the webinar, the Ministry of Finance seeks to get valuable inputs on ways to accelerate the pace and achieve the agenda of the themes. By leveraging stakeholders' expertise and experience, an action plan for effective implementation of growth reforms will be catalyzed,' it said.

The Commerce Secretary level meeting between India and Bangladesh was held in New Delhi on 4th March 2022. The Indian delegation was led by Commerce Secretary, Government of India, Shri B.V.R. Subrahmanyam and the Bangladesh delegation was led by Senior Secretary, Ministry of Commerce, Government of Bangladesh, Mr. Tapan Kanti Ghosh.

 

Both sides held extensive discussions on a variety of issues of mutual interest, including development of railway infrastructure, port infrastructure, Joint Study on Comprehensive Economic Partnership Agreement (CEPA), Border Haats, Regional connectivity through Multi-Modal Transportation, Harmonization of Standards, Mutual Recognition Agreement. 

 

Of the many issues discussed, progress on the following agenda items was appreciated by the delegation of both the countries: -

 

· Significant growth in the bilateral trade between the two countries in recent years -Bangladesh is the   6th largest trade partner of India.

 

· For facilitation of trade between India-Bangladesh through railways

 

a) For developing container handling facility at Sirajganj Bazar a Detailed Project Proposal (DPP)    approved.

 

b) For running freight trains between India-Bangladesh, 900 metre new siding line constructed at Benapole.

 

c) For allowing import of all commodities from India by rail via Darsana, the construction of loading and     unloading platform completed at Darshana.

 

d)  For development of Rail and Road based ICD at Ishwardi, the DPP approved.