New Delhi, May 16 (IANS): The immediate priority should be to control domestic prices of key food grain wheat rather than target export-oriented earnings, said V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Notably, the Centre late last week placed a ban on wheat exports with immediate effect in the wake of the grave situation of less than estimated domestic wheat production estimates and an excessive global price hike after a spike in demand following the Russia-Ukraine war.

Both Russia and Ukraine are some of the major exporters of wheat.

"This (ban) can be problematic for long-term exports which need stability in policy," Vijayakumar said.

However, the present priority should be to control domestic prices by ensuring adequate availability of the foodgrain, Vijayakumar added.

"The government's goal of exporting 10 millions of wheat in FY 23 capitalising on the sharp increase in global prices was well conceived. But the unexpected severe heat wave in March impacted production, triggering sharp spikes in spot prices of wheat."

To put things into perspective, India's retail inflation accelerated to 7.79 per cent in April due to high fuel and food costs. The inflation print remained above the 6 per cent tolerance band of the central bank for a fourth month in a row.

In April, food inflation came in at 8.38 per cent, data showed.After putting a ban on the foodgrain, the Centre said it was, however, committed to provide food security to its own population, its neighbours and also some vulnerable countries and hence brought in the amendment in relevant sections of the Export Policy.

Notably, exports would be allowed only in case of shipments where an irrevocable Letter of Credit (LoC) has been issued on or before May 13.

Since the new wheat produce came in the market, a large number of farmers had been selling their produce to private traders who in turn were sending it to exporters in the face of the huge demand.

The current wheat price in India is well above the Centre's assured Minimum Support price, which in itself is a rare phenomenon.

The Minimum Support Price for wheat for 2022-23 marketing season was fixed at Rs 2,015 per 100 kg.

It is important to note that prices of wheat remain on the lower side during this time of the year as freshly harvested rabi crops make their way into the physical markets or mandis.