Don’t export tomorrow’s wheat surplus today

India is not short of wheat. The question is whether it knows enough about the crop it will harvest six months from now to export freely today.

On August 24, wheat exports moved from “prohibited” to “free”, following calibrated permissions of 2.5 MMT each in February and April. The balance sheet looks comfortable. Production is officially estimated at 120.7 MMT, though trade estimates are closer to 110 MMT. Procurement reached 35.76 MMT, against about 30 MMT last year. Central Pool wheat stocks stood at nearly 48 MMT on September 1, more than twice the October 1 buffer norm of 20.5 MMT. But a buffer surplus is not an export surplus. Today’s abundance comes from a crop already harvested. The crop that must replenish these stocks will be sown over the next two months, and there are reasons for caution.

The monsoon is about 15 per cent below normal, and the risk is uneven. Punjab and Haryana face large rainfall deficits, but their heavily irrigated wheat can lean on groundwater, at a cost to aquifers and state power subsidies. Rajasthan is more exposed: Rainfall is about 25 per cent below normal and reservoir storage about 31 per cent below. Bihar has received around 35 per cent less rain, raising concerns over pre-sowing moisture and groundwater recharge. Madhya Pradesh and Uttar Pradesh are better placed for now.

The outlook adds to the risk. NOAA’s September 14 update keeps El Niño in place through January-March 2027. The International Research Institute for Climate and Society sees higher chances of below-normal rain and above-normal temperatures over parts of India through March. A warmer winter is effectively a shorter one, and March matters most — an early temperature rise during grain filling cuts yields.This is not a forecast of crop failure. But parts of the wheat belt enter rabi with a thinner water cushion, and the heat risk is very much alive.

Nor can wheat be viewed apart from rice. Rice prices are already 7-8 per cent above a year ago, and kharif acreage is nearly 17 lakh hectares lower. Rabi and summer rice may recover some of this, but weak reservoirs and an unfavourable weather outlook could limit that. India’s cereal basket therefore has less room to absorb a wheat shock than headline stocks suggest.

The incentive to export is real. Black Sea wheat lands at Chittagong for about $380/mt, against roughly $330/mt for Indian wheat (based on Rs 27/kg in Madhya Pradesh). Forward markets point firmer too. May 2027 Chicago wheat is around $275/mt and Kansas HRW near $300/mt, both about 15 per cent above May 2026 levels. With Black Sea disruptions persisting, futures are not signalling cheap wheat by the time India’s next crop arrives.

India has seen how quickly such calculations change. In February 2022, Indian wheat production was estimated at a record 111.3 MMT. With the Russia-Ukraine war disrupting global supplies, India stepped up exports and targeted 10 MMT for 2022-23. Then came the unusually hot March. As late as May 12, the government was announcing trade delegations to promote wheat exports. A day later, exports were prohibited. On May 19, the production estimate was cut to 106.4 MMT.

Sugar offered a reminder just last month. On expectations of comfortable availability, the government expanded sugar exports in February. Production subsequently disappointed. By August, policy had moved from permitting additional exports to allowing duty-free raw sugar imports.

Such swings carry another cost. Opening exports fully and then shutting them abruptly erodes India’s reliability as a supplier. The answer is not to halt agricultural exports whenever forecasts are uncertain, but to retain room to respond.

India can keep a calibrated wheat export window and revisit it as information improves. If the crop is excellent, India can always export more. Wheat shipped today cannot be recalled if the harvest disappoints.

India has enough wheat now. What it lacks is enough information about its next crop. That is a reason to preserve optionality, not surrender it.