Heat-stricken India has upset the G7 with a wheat export ban

In a push for countries suffering from supply shortages and rising prices since Russia’s invasion of Ukraine, India banned wheat exports without official approval on Saturday, the hottest March on record production.

The announcement sharply criticized a meeting of agriculture ministers from seven industrialized nations in Germany, who said such measures would “exacerbate the crisis” of rising commodity prices.

“If everyone starts imposing export bans or closing markets, it will only make the crisis worse,” German Agriculture Minister Sam Ozdemi told a news conference in Stuttgart.

Global wheat prices have risen since Russia’s invasion of Ukraine in February, citing a 12 percent drop in global exports.

Rising prices due to fertilizer shortages and poor harvests have fueled global inflation and created fears of famine and social unrest in poor countries.

This has raised concerns about growing protectionism following the suspension of Indonesian palm oil exports and a break in India’s wheat exports.

India, the world’s second-largest wheat producer, said factors including low production and sharply high global prices meant it was concerned about the food security of its own 1.4 billion people.

The export agreement was agreed before the directive was issued on Friday, but requires government approval for future shipments, it said.

But exports could also happen if New Delhi approves other governments’ requests to “meet their food security needs”.

“We do not want the wheat to move in an uncontrolled manner where it may be stored and we hope it will not be used for that purpose – which is meeting the food needs of weak countries and vulnerable people,” said VVR Subramaniam, Commerce Secretary of India. .

New Delhi on Thursday said it was sending delegations to Morocco, Tunisia, Thailand, Vietnam, Turkey, Algeria and Lebanon “to explore the possibility of increasing wheat exports from India”.

It was not immediately clear if these visits would take place.

Holder of major buffer stocks, India has previously said that Ukraine is ready to help meet some of the supply shortages caused by the war.

“Our farmers have made sure that not only India but the whole world is taken care of,” Commerce and Industry Minister Piyush Goyal said in April.

India has said it plans to increase wheat exports this fiscal year, starting April 1, from seven million tonnes to 10 million tonnes the previous year.

While this is a small proportion of global production, assurances have provided some support for global prices and mitigated the risk of large deficits.

Egypt and Turkey have recently approved wheat imports from India.

But India has endured its warmest march on record – responsible for climate change – and has been eroding in recent weeks, with temperatures hovering above 45 degrees Celsius (113 Fahrenheit).

It has hit farmers hard, and this month the government said wheat production is expected to fall by at least five percent this year from 110 million tonnes in 2021 – the first fall in six years.

In the past, Indian wheat exports were limited due to concerns over quality and because the government buys large quantities of wheat at guaranteed minimum prices.

The country’s exports are also restricted by WTO rules which limit shipments from government stocks if grain is purchased from farmers at a fixed price.

Ukraine’s agriculture minister has traveled to Stuttgart with G7 colleagues to discuss the release of its products.

About “20 million tons” of wheat were sitting in Ukrainian silos and needed to be exported “urgently”, Ozdemir said.

Prior to the invasion, Ukraine exported 4.5 million tons of agricultural products per month through its ports – 12 percent of the planet’s wheat, 15 percent of its corn and half of its sunflower oil.

But with Odessa, Chornomersk and other ports cut off from the world by Russian warships, supplies can only travel through congested land routes that are much less efficient.

G7 ministers have called on countries not to take restrictive measures that could put further strain on commodity markets.

They have “spoken out against the export ban and called for the markets to be kept open”, Ozdemir said, adding that the nation deserves the rotating presidency of the group.

Ozdemi added, “We call on India to take responsibility as a member of the G20.”

The agriculture ministers will also “recommend” the issue at the G7 summit in Germany in June, where Indian Prime Minister Narendra Modi has been invited to attend.

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