Economikly

Russia-Ukraine Clash: A Hidden Opportunity for India

Dwight D. Eisenhower once said, “There is no glory in a battle worth the blood it costs.” Yet, here we are. It has been more than two months since the Russia and Ukraine war began and still, there are no signs of the war ending shortly. The ongoing war has led to one of the greatest humanitarian crises ever. In Ukraine itself, thousands of lives have been lost and livelihoods disrupted. More than 4.9 million refugees have fled to Poland, Hungary, Belarus, Slovakia and other places. It is extremely difficult for the government of these places to provide aid and shelter to the refugees, yet they are doing their best. It is important to understand that the repercussions of war between any two countries are felt worldwide and not only by those two countries. The Russia-Ukraine war is no different. It has brutal repercussions. 

The war has affected almost all sectors. However, it has significantly impacted the energy and food market. Russia is the world’s 2nd largest producer of natural gas. It has the largest gas reserve in the world. The war is expected to affect the supplies which is a great concern for countries like Germany, Italy and many others who completely depend on Russia for their needs. In the food sector, the concentration of wheat, corn, fertilizers and other related products in Ukraine and Russia has strained food supplies. According to the Observatory of Economic Complexity, Russia and Ukraine together account for more than a quarter (25%) of wheat exports in the world. Independently, Russia accounts for 19% and Ukraine for 9% of the wheat exports. Securing continuous supply in the near- term is an issue worthy of concern. The price of wheat has also increased substantially. A country majorly affected by this wheat supply is Egypt. 

Egypt or the Arab Republic of Egypt is a country that lies in Asia and Africa. It links North-East Africa with the Middle-East. Agriculture is a key sector in the Egyptian economy. It contributes to about 11.3% of the country’s gross domestic product and accounts for 28% of all jobs. Many crops are grown in Egypt like wheat, maize, rice, tomato, potato, onion and orange. However, the agricultural sector is dominated by small farms using traditional practices that are not enough to satisfy the requirements and do not meet international standards. 

Egypt is the largest importer of wheat. It imports mainly from Moscow and Kyiv. According to the Central Agency for Public Mobilization and Statistics, Egypt imports 13 million tonnes, that is, more than 80% of its total supply from Russia and Ukraine. Due to the war, supply from both countries has been disrupted. To diversify its purchases, Egypt has been holding talks with many countries other than India like France, Argentina and the United States. However, India stepped up to the expectations and was approved as a wheat supplier. Egypt officials from the agriculture sector visited various processing units, export units and farms in Maharashtra, Madhya Pradesh and Punjab. It was because they believed that Indian wheat might have Karnal bunt disease. Karnal bunt is a fungus disease of wheat which infects at the stage of flowering and reduces grain quality. Till now, Egypt is expected to lift about 1 million tonnes of wheat from India. Out of this, 2,40,000 tonnes was exported this April only. Piyush Goyal, Minister of Commerce and Industry and Consumer Affairs, Food and Public Distribution met the

Egyptian Minister of Economic Development, Hala H. Elsaid in Dubai where the details were discussed. He confirmed this achievement via a post on Twitter. 

This is an opportunity for India to make a mark in Egypt in terms of wheat export. This is a golden chance to ship record quantities. India targets to replace Russia and Ukraine in thirty wheat importing countries. As of now, India exported wheat mainly to Bangladesh. According to the data, Bangladesh imported more than 54% of wheat in both value and volume terms in 2019-20. India is also looking at increasing the share of exports among its existing buyers such as Sri Lanka, Korea, Nepal and many more. The country hopes to achieve a wheat export target of at least 10 million tonnes in FY-23. There are chances that this might rise as high as 15 million tonnes. 

To conclude, India is working hard to improve the quality and increase the quantity produced of wheat to get more orders. Plans have been drawn out and implemented for increasing the number of government-approved laboratories to test the quality of wheat for export. Furthermore, the government has also asked the state-run Bureau of Indian Standards to monitor the quality. The Prime Minister of India, Mr Narendra Modi emphasized the country’s readiness to export top quality wheat grain to other countries. Due to the disrupted supplies, Egypt, Israel, Oman, Nigeria, and South Africa have approached India to secure wheat. This is an opportunity for the country to showcase to the whole world, what India and its farmers are capable of. Mr Piyush Goyal truly wrote, Our farmers have ensured our granaries overflow & we are ready to serve the world.”

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