The sale of a 55,000-tonne shipment of Indian wheat to a Dutch corporation called ETG Commodities, which then pursued a Turkish customer, has become a mystery.
What happened to a major wheat export shipment from India that was shipped out in mid-May by corporate conglomerate ITC Ltd?
Why was Turkey so adamant about rejecting it? Did Egypt also reject it? How does the rubella virus, which infects humans, contaminate wheat?
Is this ship hunting for a buyer in international waters? Is this all just part of a great global commodities trade conspiracy at a time when the world is dealing with food inflation and grain scarcity?
The answer to the last issue may not be known for some time, if at all, but Rajnikant Rai, CEO of ITC’s agribusiness sector, cleared the air on the rest, dismissing reports that the cargo failed to meet the contract’s quality specifications.
Rai told ThePrint in an exclusive interview that the 55,000-tonne shipment was sold to a Dutch company called ETG Commodities, which hired SGS, a Swiss company, to conduct quality checks.
“ITC met the contract quality requirements, and the ship sailed in mid-May. ETG later informed us that it had been sold to a Turkish buyer. “We learned in late May that the shipment had been refused by Turkey,” Rai said. He went on to say that both ITC and ETG had been paid for the agreement.
“However, neither we nor ETG ever received a report on why the application was denied.” The claims that the wheat was rejected because of the presence of the rubella virus or because it contained less protein than required, and that Egypt followed Turkey in rejecting it, are “simply rumors,” he claimed.
“The ship never traveled to Egypt and is now berthing at an Israeli port ready to be unloaded,” Rai added, indicating that the consignment has found a new customer.
There could be “commercial or geopolitical motives at play here,” according to an official with an international commodity trading firm who did not want to be identified. The official stated, “Raising quality issues appears to be an attempt to undermine India’s status as a worldwide grains supplier.”
According to S. Chandrasekaran, a New Delhi-based trade analyst, a handful of European traders dominate and control the wheat trade in the Middle East and African markets, and the Indian wheat cargo being infected with the Rubella virus is “a myth fabricated by Turkey.”
Getting a handle on the worldwide wheat market
ITC exported around 1.8 million tonnes of wheat in 2021-22, according to Rai, and shipped 1.3 million tonnes of wheat in April and May of this year.
“However, not a single shipment has ever had an issue. The wheat that was shipped to Turkey was top-quality durum wheat from Madhya Pradesh, with a protein content of over 14%.”
The rubella virus is not included in any wheat contract specifications elsewhere in the globe, according to Rai.
After banning wheat exports on May 13 to combat rising domestic food costs, India received harsh worldwide condemnation. According to the UN’s Food and Agriculture Organization, international wheat prices were 56% higher year over year in May. Following Russia’s invasion of Ukraine, global food prices have risen.
India, which accounts for around 40% of world rice trade volume, has been a minor player in the wheat trade so far. However, the current crisis has provided India with an opportunity to establish itself as a serious wheat player and a leading food exporter.
“Rubella is a fiction propagated by Turkey,” said trade analyst Chandrasekaran
“It is now aiming to influence global wheat commerce by assisting supplies trapped in Ukraine’s Odessa port.” If continuing talks between Ukraine, Russia, and Turkey are successful, substantial amounts of wheat blocked in Ukraine could be released into the world market in a controlled manner,” he noted.
“As a result, Turkey sees no reason to permit Indian wheat to enter the market.” By rejecting Indian wheat, Turkey is attempting to communicate to the market that huge quantities of wheat will be arriving shortly, with Turkey handling the logistics. India may become a victim of powerful trade lobbies and global geopolitics as a result of this process.”