Wheat prices hit record high after Indian export ban

by Sofia BOUDERBALA
Agence France Presse

Wheat costs surged to a brand new document excessive in European buying and selling on Monday after India determined to ban exports of the commodity as a heatwave hit manufacturing.

The worth jumped to 435 euros ($453) per tonne because the Euronext market opened, up from the earlier document of 422 euros reached on Friday.

International wheat costs have soared on provide fears since Russia’s February invasion of agricultural powerhouse Ukraine, which beforehand accounted for 12 % of world exports.

The spike, exacerbated by fertiliser shortages and poor harvests, has fuelled inflation globally and raised fears of famine and social unrest in poorer international locations.

India, the world’s second-largest wheat producer, mentioned on Saturday that it was banning exports after its hottest March on document, with merchants needing specific authorities approval to enter into new offers.

New Delhi mentioned the transfer was wanted to guard the meals safety of its personal 1.4 billion folks within the face of decrease manufacturing and sharply larger world costs.

Some elements of India have seen costs in wheat and flour leap 20 to 40 % in current weeks, Commerce Secretary BVR Subrahmanyam mentioned on Sunday.

Due to the sharp rise in world costs, some farmers had been promoting to merchants and to not the federal government.

This obtained the federal government apprehensive about its buffer inventory of virtually 20 million tonnes — depleted by the pandemic — wanted for handouts to tens of millions of poor households and to avert any doable famine.

– ‘Worsen the disaster’ –
Export offers agreed earlier than the directive issued on Might 13 may nonetheless be honoured however future shipments wanted authorities approval, it mentioned.

Nonetheless, exports may additionally happen if New Delhi accredited requests from different governments “to satisfy their meals safety wants”.

India, which possesses main buffer shares, beforehand mentioned it was prepared to assist fill a number of the provide shortages attributable to the Ukraine warfare.

Solely final week India mentioned it could ship delegations to Egypt, Turkey and elsewhere to debate boosting wheat exports. It was unclear whether or not these visits will now go forward.

The export ban drew sharp criticism from the Group of Seven industrialised nations, which mentioned that such measures “would worsen the disaster” of rising commodity costs.

India recorded its warmest March on document — blamed on local weather change — and in current weeks has seen a scorching heatwave with temperatures upwards of 45 levels Celsius (113 Fahrenheit).

This hit farmers in wheat-producing northern India, prompting the federal government to foretell output would fall not less than 5 % this 12 months from 109 million tonnes in 2021.

© Agence France-Presse