Due to a searing heat wave, India has restricted wheat exports, causing domestic prices to surge to all-time highs. The Indian government stated that shipments backed by letters of credit already given and to countries requesting supply “to satisfy their food security needs” will be permitted. After Russia’s invasion of Ukraine, shipments from the Black Sea region plummeted, global customers were counting on supplies from the world’s second-largest wheat producer. India had planned to send a record 10 million tonnes this year before the restriction. Given the already restricted supply, India’s ban might drive world prices to new highs, particularly harming poor consumers in Asia and Africa.
“The restriction is startling,” said a Mumbai-based global trading firm dealer. “We expected export restrictions after two to three months, but the government’s position appears to have altered as a result of the inflation figures.” In April, rising food and energy costs brought annual retail inflation in India to an eight-year high, bolstering anticipation that the central bank will raise interest rates more aggressively. Wheat prices in India have reached new highs, with increasing fuel, labour, transportation, and packaging expenses driving up wheat flour prices. The government predicted a crop of 111.32 million tonnes in February, the sixth consecutive record crop, but it was trimmed to 105 million tonnes in May.
According to a New Delhi-based trader with a worldwide trading firm, a surge in temperatures in mid-March indicates the harvest could be around 100 million tonnes or even lower. India shipped a record 7 million tonnes of wheat in the fiscal year to March, up more than 250 percent from the previous year, thanks to a rise in global wheat prices following Russia’s invasion of Ukraine. India exported a record 1.4 million tonnes of wheat in April, and contracts have already been inked for about 1.5 million tonnes in May. “The ban in India will increase worldwide wheat prices. There is currently no major supplier on the market “another vendor stated.