India has banned wheat exports in the process, which is likely to raise food prices and feed hunger in poor countries that depend on imports of these goods.
The Indian government has said it is implementing a ban on overseas sales “to manage the country’s overall food security and support the needs of neighboring and other vulnerable countries”.
However, she said she would still allow exports for which letters of credit have already been issued and would consider selling to countries that want to meet their food security needs.
The announcement, one of the latest protectionist measures taken by food-exporting countries since rising prices this year, was followed by refusals by Indian government officials to suspend wheat exports.
India was filling a gap in international export supplies of wheat left by Ukraine after the Russian invasion, but fears have grown over export restrictions amid the heatwave that has hit the country since March.
The reversal came after Indian government figures this week showed domestic inflation jumping to its eight-year high, with rising food prices worrying politicians.
Traders predicted chaotic trade in international wheat markets when they open early next week, as the ban will be a blow to buyers seeking wheat supplies. “It’s an absolute bomb,” said Svitun Steele, a grain trader based in Switzerland. “There will be panic in wheat futures markets when they open,” he added.
One of the world’s largest producers of wheat, India had a large harvest last year, while some other key exporters, including Canada and Argentina, were hit by bad weather.
Wheat exports from India rose to a record 7 million tonnes in the year ended March, as the war nearly halted exports from Ukraine.
But the intense heat in March and April, where temperatures below 45 ° C hit much of India’s wheat belt, heightened fears about the country’s domestic supplies. With a few more weeks of heat expected before the start of the annual monsoon next month, the government recently lowered its forecast for the current harvest by 5 percent to 105 million tons for the year to June.
Wheat prices are skyrocketing due to fears of supplies caused by the war in Ukraine and droughts around the world. The US Department of Agriculture predicts that world supplies for next year’s harvest will fall for the first time in four years. “The USDA has made it clear that we are heading for a global food crisis,” said Carlos Mera, an analyst at Rabobank. “The next 12 months will be a lot of challenges.”
Wheat futures in Chicago, the international benchmark, closed at $ 11.6725 per bushel, which is 50% more than at the beginning of the year, while the European wheat futures market was at 410.75 euros per tonne, slightly less than its record high in March.
India’s consumer price index rose 7.8% in April from a year earlier, according to data released on Thursday, the highest since 2014.
Fears of soaring prices have prompted the Reserve Bank of India to raise interest rates unexpectedly this month for the first time in four years.
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