India bans wheat exports because the heat wave is curtailing production and prices are rising

India bans wheat exports because the heat wave is curtailing production and prices are rising


A combine harvester stores wheat harvested in a tractor cart in a field on the outskirts of Ahmedabad, India, March 16, 2022. REUTERS / Amit Dave

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  • The ban could push world wheat prices to new highs
  • Prior to the ban, India aimed to export 10 million tonnes of wheat
  • The heat wave reduces the size of the wheat crop and increases prices
  • Government purchases fell by more than 50% compared to the previous year

Mumbai, May 14 (Reuters) – India has banned wheat exports with immediate effect on Saturday, just days after saying it is targeting record deliveries this year as a wave of burns cut production and local prices reached historic high amid strong export demand .

The government said it would still allow the export of letters of credit that had already been issued and at the request of countries trying to “meet their food security needs.”

Global buyers have opted for supplies from the world’s second-largest wheat producer after exports from the Black Sea region fell after Russia’s invasion of Ukraine in late February. Prior to the ban, India was aiming to ship a record 10 million tonnes this year. Read more

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India’s ban could raise global prices to new highs and reach poor consumers in Asia and Africa.

“The ban is shocking,” said a businessman with a global business based in Mumbai. “We expected export restrictions after 2-3 months, but inflation figures seem to have changed the government’s view.”

Rising food and energy prices pushed India’s annual retail inflation to an eight-year high in April, reinforcing economists’ view that the central bank will need to raise interest rates more aggressively to cut prices. Read more

Wheat prices in India rose at record highs, reaching 25,000 rupees ($ 322.71) per tonne in some spot markets, compared to a government-set minimum support price of 20,150 rupees.

LOWER GROWTH SIZE

Earlier this week, India outlined its record export target for fiscal year 2022/23, which began on April 1, adding that it would send trade delegations to countries such as Morocco, Tunisia, Indonesia and the Philippines to explore ways to further increase supplies. .

However, the sharp and sudden rise in temperatures in mid-March means that crop sizes could be smaller than expected, at around 100 million tonnes or even lower, a New Delhi-based global trading firm said, according to a government estimate for an all-time high. 111.32 million tons. Read more

“Government purchases have fallen by more than 50%. Spot markets are receiving much lower deliveries than last year. All of these things indicate lower yields,” the dealer said.

India exported a record 1.4 million tonnes of wheat in April, and export agreements of around 1.5 million tonnes were signed in May. Read more

“The Indian ban will raise global wheat prices. There is no big supplier on the market right now,” said the second dealer.

(1 $ = 77.4700 Indian rupees)

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Rapporteur Rajendra Jadhav; Edited by Himani Sarkar

Our standards: Thomson Reuters Trust Principles.

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