India suddenly banned wheat exports
According to CNBC, India has suddenly issued a ban on wheat exports in the context of a prolonged heat wave that has reduced crop production and pushed up prices of this commodity. The fact that the Russia-Ukraine conflict threatens the food security of India and its vulnerable neighbours, is also believed to be one of the reasons behind the upward trend in wheat prices.
Immediately after the official announcement, the Indian government said it would still export the remaining wheat contracts signed previously, and hoped that the countries could try to meet the food security needs of the country. .
The decision made many economic experts worry, because most importing countries now trust India, the world’s second largest wheat producer, in ensuring post-conflict supply. Russia-Ukraine. They fear the ban will soon push global food prices to new highs and hit low-income consumers in Asia and Africa.
“This ban is really shocking. We think India will restrict exports in two or three months, but perhaps inflation has changed the government’s mind,” said a representative of a trading company. Global based in Mumbai said.
Wheat prices rise after Russia-Ukraine conflict
According to CNBC, India’s inflation in April hit an eight-year high. Wheat prices also skyrocketed, even in some spot markets up to Rs 25,000/ton ($465/ton), while the Indian Government fixed the minimum support price at Rs 20,150. This reinforces the view of the country’s officials that the central bank will soon have to raise interest rates to curb inflation.
Before the ban, India had set a record export target of 10 million tonnes of wheat this year as a way to capitalize on disruptions to wheat supplies while also looking for new markets in Europe. Africa and Asia. Most of it will be shipped to developing countries such as Indonesia, the Philippines and Thailand.
However, due to the effects of the prolonged heat wave, wheat production declined. Experts estimate this year’s wheat harvest is only about 95 million tonnes, lower than the government’s estimate, due to a more than 50% drop in purchasing activity.
In April, India exported a record 1.4 million tons of wheat. This helps calm the grain market somewhat as importers are racing to find alternatives to supply in the Black Sea. In addition, India has also signed agreements to export about 1.5 million tons of wheat in May.
“India’s ban will lift global wheat prices, because besides India, there are no other major suppliers in the market,” CNBC quoted an economist as saying.
Wheat harvest activity
It is known that India is experiencing a terrible heat wave. According to The Guardian, over the weekend, Bikaner was recorded as the hottest area in India, with a temperature of up to 47.1 degrees Celsius. In the northwest region of India, satellite images even show that Temperatures have sometimes exceeded 60 degrees Celsius in some places.
“The hottest temperatures on record are southeast and southwest of Ahmedabad, with a maximum surface temperature of around 65 degrees Celsius,” the European Space Agency announced.
Most importantly, this record heat came right around the time when Indians had to endure constant power cuts. Many factories were forced to shut down.
This situation is happening in many states, including Jharkhand, Haryana, Bihar, Punjab and Maharashtra due to the severe drop in domestic coal supply while the price of imported coal skyrocketed. To fix it, the Indian railway system had to cancel more than 600 passenger and freight trains to make room for transporting coal to power plants.
According to: CNBC
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