The second global producer, India bans wheat export

Investigator’s guide

India announced, on Saturday, a ban on wheat exports in the face of reduced production, due to severe heat waves in particular, a decision that would “exacerbate the crisis” of grain supplies with the war in Ukraine, if the Group of Seven warns.

The second largest producer of wheat in the world, India has decided to ban the export of this commodity, except with special permission from the government, in order to ensure the “food security” of its 1.4 billion people.

Export contracts entered into prior to the decree may be adhered to, and this procedure relates only to future exports. For the latter, India will approve applications from other countries on a case-by-case basis. to meet their needs.

protective measures

This context also raises concerns about protectionist measures on the part of exporting countries: at the end of April, Indonesia, the largest producer of palm oil in the world, banned palm oil exports in order to contain the rise in prices in the domestic market and shortages.

Until Saturday, India for its part expressed its willingness to help global markets in case of supply problems. “Our farmers have taken care not only of India but of the whole world,” Trade and Industry Minister Piyush Goyal said last month.

The country had indicated its desire to increase its annual wheat exports, as of April 1, from 7 to 10 million tons, bringing some air to the sector. On Thursday, New Delhi also announced that delegations would go to several countries in North Africa, Turkey, Vietnam, Thailand and even Lebanon “to study ways to boost wheat exports from India.” It was not clear on Saturday whether those flights would continue.

New Delhi’s announcement comes as India has been grappling with intense heat waves for two months: the country experienced the hottest March in its history, and the heat wave has continued in recent weeks with temperatures sometimes well above 45 degrees. According to climate change experts, India is expected to be exposed to these heat waves more and more.

Earlier this month, the government indicated that these climatic conditions will lead, for the first time in six years, to a reduction in the wheat crop of at least 5% compared to 2021. About 110 million tons were harvested last year.

G7 are different

The decision was immediately criticized by the G7 agriculture ministers, meeting in Stuttgart, Germany, which comes at a time when the global wheat market is already under great tension due to the Ukraine conflict. “If everyone starts imposing such restrictions on exports or even closing markets, it will only exacerbate the crisis and also harm India and its farmers.”German Agriculture Minister Jim Ozdemir said after a meeting with his counterparts.

We have stood against export restrictions and are calling for markets to be kept open (…). We call on India to shoulder its responsibilities as a member of the G20.”

The Russian military offensive in Ukraine, launched on February 24, seriously disrupted agricultural activity in the countryside of this country, which until then was the fourth largest exporter of corn in the world, and is on its way to becoming the third exporter of wheat. Due to the blockade of Ukrainian ports, about 20 tons of grain are waiting in silos for export, and this year’s harvest is under threat.

Thus, high prices and food shortages pose a risk of famine and social unrest, especially in the poorest countries that import their grain needs in large quantities.

On Saturday, agriculture ministers meeting in Stuttgart “recommended” discussion of the Indian decision at the June G7 Heads of State and Government meeting, where India will attend as a guest.

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