Indian Government has prohibited wheat exports, claiming a threat to food security, partially owing to the conflict in Ukraine and as a blistering heatwave reduced supply and pushed local prices to new highs. Despite not being one of the world’s top wheat exporters, India’s prohibition might drive global prices to new highs, putting a strain on impoverished customers in Asia and Africa. The prohibition would not last indefinitely and might be changed, authorities said during a press briefing.
About the Wheat Export:
- India’s Directorate of Foreign Trade warned that a jump in global wheat prices jeopardised the food security of India and neighbouring and vulnerable nations.
- Wheat prices in India have reached a record high, with certain spot markets seeing prices as high as 25,000 rupees ($320) per tonne, significantly above the government’s minimum support price of 20,150 rupees ($260).
- In April, rising food and energy costs brought annual retail inflation in India to an eight-year high.
- The wheat harvest in India has also been hampered by a world-record-breaking heat wave. Apart from poor harvests, India’s large wheat supplies — a bulwark against hunger – have been depleted by the supply of free grain to 800 million people during the COVID-19 outbreak.
- India’s move comes at a time when global agriculture markets are reeling from Russia’s invasion of Ukraine.
- Ukraine, a renowned global breadbasket, has seen supplies hindered, prompting the Ukrainian agricultural minister to come to Stuttgart to meet with G7 contemporaries about getting the country’s produce out.
- Ukraine exported 4.5 million tonnes of agricultural products every month before the Russian invasion, accounting for 13% of the world’s wheat, 15% of its corn, and half of its sunflower oil.
- However, with Russian warships cutting off the ports of Odesa, Chornomorsk, and others from the rest of the world, the supplies can only move via crowded and inefficient road routes.
Exemption to India’s prohibition on wheat exports:
Only export shipments for which letters of credit were issued on or before Friday will be allowed, according to the official announcement. Furthermore, according to the notification published by the Directorate General of Foreign Trade (DGFT), the government will authorise exports on request from other nations.
Reason behind India’s wheat export restriction:
The Rising food and energy costs have increased India’s annual retail inflation rate to 7.79% in April, a new high. Wheat prices in India have reached new highs as a result of growing inflation, with certain spot markets reaching 25,000 rupees per tonne, much over the government’s minimum support price of 20,150 rupees.