India export ban: Why did India suddenly ban wheat exports?

India has banned wheat exports, pushed bushel prices to record highs, and criticized the Group of Seven, which is worried about protectionism, as Ukraine rises in the wake of the war.

The world’s second-largest wheat producer says traders can only enter into new export agreements with government approval.

Requests approved by New Delhi are still allowed due to record high prices “to meet their food security needs”, according to an order dated May 13.

India had earlier said it was ready to help cover some of the supply shortages caused by the February invasion of Ukraine, which accounted for 12 percent of world exports.

It plans to increase exports from 8 million tonnes to 10 million tonnes in the current financial year.

“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.

Last week, India said it would send representatives to Egypt, Turkey and elsewhere to discuss increasing wheat exports. It is unknown at this time what he will do after leaving the post.

Fugitive inflation and food security have been cited as reasons for the 1.4 billion poor country.

In some parts of India, Commerce Secretary BVR Subramaniam said on Sunday that wheat and flour prices have risen by 20 to 40 per cent in recent weeks.

Due to the sharp rise in global prices, some farmers were selling to traders, not to the government.

It has worried the government about its nearly 20 million tonnes of buffer stock – depleted by the epidemic – needed to hand out millions of poor families and avoid any possible famine.

“We do not want the wheat to go in an uncontrolled manner where (wheat) can be stored and we hope that it will not be used for the purpose it will be used – which is meeting the food needs of weak countries and the weak. People,” Subramanian Says.

India has recorded its warmest march on record – responsible for climate change – and in recent weeks has seen a blazing heat wave with temperatures above 45 degrees Celsius.

This has hurt wheat-producing farmers in northern India, prompting the government to predict that production will fall by at least five per cent this year from 109 million tonnes in 2021.

A meeting of G7 agriculture ministers in Germany 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,” said German Agriculture Minister Sam Ozdemir.

Wheat prices rose to new record highs on Monday, jumping 435 euros ($ 453) per tonne as European markets opened.

India is a global player and produces mostly for domestic use and about half of its exports went to Bangladesh last year.

According to the UN Food and Agriculture Organization (FAO), India was previously estimated to export 53 million tonnes of wheat in 2021, along with 53 million tonnes of wheat and mycelium (a mixture of wheat and rye), exported by Russia and Ukraine.

Its exports have been restricted due to quality concerns and WTO rules on grain purchased by the state.

Worldwide commodity prices have risen in the wake of the Ukraine conflict, which has raised fears of famine and social unrest in poor countries.

Although India is a small player, the assurance of exports from its large buffer stock has given some support to the global price and allayed fears of a large deficit.

“No order is permanent. If global supply and demand remain the same – and once cool (prices) occur, it can be seen again,” said Subramaniam.