A notification from the Directorate General of Foreign Trade said the ban came into effect on February 9.
Agricultural commodities, including wheat, have contributed significantly to the steady rise in inflation, which stood at 6.58 per cent for the week ended January 27. The wholesale inflation level in wheat for the same week stood at 11.74 per cent.
With the current wheat crop estimated at 72.5 million tonnes, up from 69.5 million tonnes in the last rabi season, the ban on exports has been imposed to ensure that the Food Corporation of India has sufficient stock of wheat during the year.
In 2006, FCI's procurement fell sharply to 9.2 million tonnes from 14.8 million tonnes in the previous year, forcing the government to import 5.5 million tonnes.
Though the government's wheat stocks of 6.2 million tonnes on February 1 were higher than those of 4.8 million tonnes a year ago, they were much lower than the stipulated 8.2 million tonnes.
However, some experts said the ban would have no impact on prices. One, wheat prices in the futures market are lower than current prices (March deliveries are quoting at Rs 954 a quintal, 11 per cent lower than the spot price of Rs 1,070 a quintal), which clearly indicates the market expects prices to fall once the current crop is harvested and the produce reaches the markets.
Two, Indian wheat prices are higher than global prices, making exports an unviable proposition.