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India bans wheat exports as heat affects crops, domestic prices soar

India stockpiles wheat to prevent famine. (Photo: Reuters)

A notice in the Government Gazette of the Directorate General of Foreign Trade of India stated, wheat price global spike, in part due to the conflict in Ukraine, threatens Food Security of India, neighboring countries and other vulnerable countries.

Government of India confirmed they will still allow export of wheat for pre-signed sales contracts and at requests from countries trying to “meet their food security needs”.

Before the ban, India had set a target to export a record 10 million tonnes of wheat this year.

Global buyers still trust India, the world’s second-largest wheat producer, in providing supplies after the export of this commodity from the Black Sea region declined due to the Russia-Ukraine conflict. .

Before the Russia-Ukraine crisis, these two countries accounted for a third of global wheat and barley exports.

Since Russia launched a special military operation in Ukraine on February 24, Ukraine’s ports have been blocked, civilian infrastructure and grain silos have been destroyed.

India’s ban could push global food prices to new highs and affect low-income consumers in Asia and Africa.

India bans wheat exports due to hot weather affecting crops, high domestic prices - Photo 1.

India’s wheat export ban could push global prices to new heights. (Photo: Reuters)

“This ban is shocking,” said a Mumbai-based agent of a global trading firm. “We had expected the export restrictions to be announced in the next two to three months, but (apparently) inflation has caused the Government to change its mind.”

Rising food and energy prices pushed India’s annual retail inflation in April to an eight-year high, reinforcing economists’ view that the central bank will have to raise interest rates sharply. than to control prices.

Wheat prices in India have surged to record highs, in some spot markets reaching Rs 25,000/ton ($465/mt), while the Indian Government fixed a minimum support price at Rs. 20,150 Rupees.

Despite being the world’s second largest wheat producer, India consumes most of the wheat it produces.

The country has set a target of exporting 10 million tonnes of grain between 2022 and 2023, seeking to take advantage of global disruptions to wheat supplies due to war and find new markets for its wheat in Europe, Africa and Asia.

Most of these exports will go to other developing countries such as Indonesia, the Philippines and Thailand.

In addition to weather problems affecting harvests, India’s huge wheat stocks, intended to aid in the fight against famine, have been strained by the free distribution of grain during the pandemic to some 800 people. million people.

However, the sharp and sudden increase in temperature in mid-March caused the crop size to be about 100 million tons lower than expected or even lower than the Government’s estimate, with the highest level at that time. is 111.32 million tons.

Government purchasing activity has fallen by more than 50%. The spot markets are receiving much lower supply than in 2021. All of this indicates lower seasonal output.

In April, India exported a record 1.4 million tons of wheat and agreements were signed to export about 1.5 million tons in May.

India’s ban will lift global wheat prices. There are currently no major vendors in the market (other than India).

Western European countries lost their wheat crop Western European countries lost their wheat crop – Wheat crop failure in many Western European countries, while rice prices do not increase, damage not only wheat farms, but also adversely affect the livestock industry.

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