The New York Times published a report on new global concerns about India’s ban on wheat exports.
At a time when high food prices are worrying policymakers, India, the world‘s second-largest wheat producer, is banning exports of the commodity after filling a supply gap in international markets caused by Russia’s war with Ukraine, the report said. India’s move is likely to lead to higher food prices and starvation in poor countries that depend on imports of the commodity.
Wheat prices have reached alarming levels amid supply concerns over the war in Ukraine, according to US newspapers.
According to the U.S. Department of Agriculture, India holds about 10 percent of the world‘s grain reserves, a huge surplus due to its strong support to farmers, the report said.
For months, India has been seen as a country that could help make up for global supply shortfalls, the newspaper said in its report.
The report’s authors, Samir Arthur and Victoria Kim, said the wheat export ban announced in a Commerce Ministry circular on Friday represented a change from an earlier statement by Indian Prime Minister Narendra Modi. In April, Modi told U.S. President Joe Biden that India was ready to provide the world with the country’s reserves. He also urged local wheat producers to seize the opportunity and said Indian officials and financial institutions should support exporters.
The authors added that agricultural experts said that a prolonged heatwave and rising temperatures could affect this year’s harvest, which could be a factor in the Indian government’s re-routing and imposition of a wheat export ban.
The newspaper’s report quoted India’s Commerce Ministry’s statement on Friday that wheat exports will be banned immediately, with some exceptions, given that a sudden increase in crop prices threatens the country’s food security; for governments at risk to food supplies, India allows Limited exports to meet its needs.
Indian authorities announced a ban on wheat exports starting Saturday to avoid endangering the country’s food security.
The increase in global wheat prices threatens the food security of India and vulnerable neighbors, the foreign trade bureau said in an announcement in the official gazette on Friday.
Crackdown on International Organizations
India’s ban on wheat exports could deal another blow to international organizations working to combat the growing threat of widespread hunger, The New York Times reported.
The report cited warnings from the UN agency World Food Programme that the impact of successive wars, combined with the current crisis, typified by sharply rising food prices and fertilizer shortages, could cause an additional 47 million people to suffer from hunger.
The report quoted the agency’s chief economist, Arif Hussain, as saying that “the agency is in discussions with India to use its stockpiles to alleviate supply shortages”. He explained that the World Food Programme has urged countries not to impose export bans, as such actions could drive up prices and reduce supplies, saying “we hope countries will listen to this advice”.
The report quoted prominent Indian agricultural economist Ashok Gulati as saying, “The announcement by the Ministry of Commerce has had a serious impact on India as it goes against the government’s previous statement on supplying wheat to countries in need.” Thie added, “If there is a global impact, you can control it by opening up rather than closing it.”
The authors conclude the report by noting that the move may be unpopular among Indian farmers, with a farmer in Punjab arguing that “the ban may affect wheat growers who have recently benefited from higher prices and demand”.
India’s Commerce Ministry on Sunday expressed its willingness to export wheat at the government level to countries suffering from food shortages, despite the recently announced restrictions, Anadolu news agency reported.
In a press conference, Minister Subramaniyam said that India will continue to open its doors to export wheat at the government level to countries suffering from food shortages. He added that the government will also allow private companies to fulfill previous commitments to export nearly 4.3 million tonnes of wheat by July.
India mainly exports wheat to neighboring countries such as Bangladesh, Nepal and Sri Lanka.
Before the Russian-Ukrainian war, Kyiv and Moscow accounted for a third of global wheat and barley exports, according to the Associated Press, while Ukrainian exports were hit by port closures, civilian bases after Russia launched its military campaign on Feb. 24, the Associated Press reported. There was a significant drop after facilities and granaries were damaged.
India’s wheat crop has also been hit by a record heatwave that disrupted production, and while India is the world‘s second-largest wheat producer, it also consumes most of the wheat it produces.
New Delhi’s decision to ban wheat exports comes a day after government data showed the consumer price index rose to an eight-year high of 7.79 percent in April, with retail food price inflation hitting 8.38 percent, according to India’s Indian Express.
What about Egypt, the largest wheat importer?
Egyptian Supply Minister Ali Moser said India’s decision to ban wheat exports does not apply to some governments, including those in Cairo. “We are negotiating with India, Australia, Kazakhstan and France for a direct wheat purchase agreement,” he added.
Egypt, one of the world‘s largest wheat importers, relies heavily on exports from Ukraine and Russia, and its government is seeking alternative supplies from countries such as India.
Prime Minister Mustafa Madbouli said the country’s strategic reserves of wheat are sufficient for four months.
India on Saturday announced it was targeting record shipments this year, but days after a severe heatwave slashed food production and raised domestic prices to record levels, India decided to ban wheat, Reuters reported. exit.
Indian government officials, speaking hours after the ban on wheat exports, said wheat production had not fallen significantly this year, but unregulated exports had pushed up domestic prices.
Wheat exports from the Black Sea region have fallen since Russia’s war with Ukraine, and global buyers have relied on India for supplies. Before the ban, New Delhi was targeting shipments of 10 million tonnes this year.
“While India is not one of the world‘s major wheat exporters, the ban could push global prices to new record levels and affect poor consumers in Asia and Africa,” the Reuters report said.
Protectionism puts extra burden on the poor
About two weeks ago, a New York Times report said dozens of countries had erected trade barriers in the past two months to protect short supply of food and commodities, but experts say those policies will only exacerbate the global food crisis .
Ukraine has restricted exports of sunflower oil, wheat, oats and livestock to protect its war-torn economy, the report said. Russia has banned the sale of fertilizers, sugar and grains to other countries.
Indonesia, which produces more than half of the world‘s palm oil, also stopped exporting. Turkey also stopped exports of butter, beef, lamb, goat, corn and vegetable oils.
According to the New York Times, the Russian-Ukrainian war has sparked a new wave of protectionism, as governments struggle to provide food and other goods to their citizens amid supply shortages and rising prices, and erect new barriers to stop exports.
The measures are often well-intentioned, but like the panic buying of grocery stores in various times of the pandemic, the current wave of protectionism has only exacerbated the problems the government is trying to alleviate, as trade experts have warned, the report said.
The report pointed out that restricting exports will make grain and oil, meat, fertilizer and other prices rise to record levels, or even difficult to obtain.
This places a greater burden on the world‘s poor, causing them to pay a larger share of their income for food, and increases the risk of social unrest in poorer countries facing food insecurity, the report said.
The New York Times concluded that countries have imposed 47 restrictions on exports of food and fertilizers since the start of the year, 43 of which have been in place since the outbreak of the Ukraine crisis in late February.