India, the world’s second largest wheat producer, blocked all grain exports immediately.
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India is banned wheat Exports took effect immediately on Saturday, just days after it said it was aiming for record shipments this year, as a scorching heat wave slashed output and domestic prices peaked. all time in the context of strong export demand.
The government said it would still allow exports of letters of credit already issued and upon request from countries trying to “meet their food security needs.”
Global buyers are counting on the world’s second-largest wheat producer to supply supplies after exports from the Black Sea region tumbled following Russia’s invasion of Ukraine in late February. Before the ban, India had set a target to ship a record 10 million tonnes this year.
India’s ban could push global prices to new highs and hit poor consumers in Asia and Africa.
“This ban is shocking,” said a Mumbai-based agent with a global trading company. “We were expecting to restrict exports after 2-3 months, but it seems the inflation numbers have changed the government’s mind.”
Rising food and energy prices pushed India’s annual retail inflation to an eight-year high in April, reinforcing economists’ view that the central bank will have to raise interest rates more aggressively. to control prices.
Wheat prices in India have hit a record high, in some spot markets reaching 25,000 rupees ($322.71) a tonne, compared with a fixed minimum government support price of 20,150 rupees.
Heat waves shrink crops
Earlier this week, India outlined its record export target for the fiscal year 2022/23 starting April 1, and it will send trade missions to countries like Morocco, Tunisia, Indonesia and the Philippines to find ways to further boost shipments.
But one sudden and sharp rise in temperature Mid-March means the crop size could be around 100 million tonnes smaller than expected or even lower, said a New Delhi-based dealer with a global trading company, compared with government estimates of an all-time high of 111.32 million tonnes.
“Government buying activity has fallen by more than 50%. The spot markets are receiving much lower supply than they were last year. All of this indicates a lower season,” the dealer said.
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 no major suppliers in the market at the moment,” said the second agent.
