Recently, international wheat prices surged following India’s restriction on exporting the grain. As soon as the European market opened, the price surged to $453 a tonne. Chicago wheat futures had already reached their daily trading limit, and Paris prices were nearing all-time highs, making the Chicago market the global standard for wheat futures. In this article, we will be reading about the latest news as wheat prices hit record high after Indian export ban.
Latest News: Wheat prices hit record high after Indian export ban
Wheat exports have been banned in India as a result of rising domestic prices. For reasons of food safety, India, the world’s second-largest wheat producer, has prohibited the export of wheat. Over the past 12 years, estimates have indicated that the monthly average retail price of wheat flour has reached Rs 32.38 per kg.
The ongoing Russian-Ukrainian conflict and the blistering temperatures have both contributed to a potential wheat scarcity in the nation, pushing domestic prices to record highs. Since Russia’s invasion of Ukraine at the start of the year, global wheat prices have surged by more than 40%. Ukraine and Russia supplied a third of the world’s wheat and barley exports before the conflict.
What prompted India’s decision to suspend exports?
The food security of India and other vulnerable nations is in jeopardy because of a poor wheat yield this year.
On Friday, May 13, 2022, India’s Directorate of Foreign Trade published a notification in the official gazette.
This year’s sweltering temperature in India has reduced the country’s wheat crop production.
The current conflict between Russia and Ukraine is also contributing to the country’s wheat scarcity concerns.
Second, only to the United States in wheat production, India seeks to cool domestic prices that have risen to their highest level in 12 years.
India’s wheat output didn’t reduce much this year, but government officials claim that unregulated exports have contributed to a surge in local prices.
We do not want wheat trading to be uncontrolled or for stockpiling to occur, commerce secretary, BVR Subrahmanyam stated.
The delivery of free food to 800 million people during the Covid-19 outbreak has taken a toll on India’s massive wheat reserves.
In a statement, India said it will enable wheat exports for letters of credit that have already been given.
On the request of nations that are striving to meet their food security demands,’ India will also approve exports.
1.4 million tonnes of wheat were sold by India in April, and agreements had already been struck for another 1.5 million tonnes to be shipped in May.
A record high of Rs 25,000 per tonne has been recorded in several spot markets, considerably above the government’s MSP of Rs 20,150 per tonne.
The embargo on wheat exports, authorities said during a press conference, would not be permanent and might be altered.
What was the reaction of the rest of the world?
Exports from the Black Sea region had fallen precipitously as a result of the conflict, and purchasers throughout the world had turned to India for replacements.
G7 industrialized nation agriculture ministers slammed India’s move on Saturday.
This might lead to an even bigger economic catastrophe, the German Agriculture Minister stated.
Due to a lack of supply, India’s prohibition might push world prices to new highs, mainly affecting impoverished customers in Asia and Africa.
Since Russia’s invasion of Ukraine, supplies from the country’s traditional breadbasket have been severely hampered.
Ukrainian ports used to export 4.5 million tonnes of agricultural products per month, or about 12 percent of the world’s wheat, before Russia’s invasion.
Ozdemir claimed that the German government urgently needs to export around 20 million metric tonnes of wheat that is now stored in Ukrainian silos.
Egypt, a major wheat importer, said on Sunday that it will be spared from the restrictions on government purchases.
500,000 tonnes of wheat will be imported from India, which was recently recognized as an import source.
Download E-Startup Mobile App and Never miss the latest updates narrating to your business.