By Alexander Miller, consultant in emerging markets – Eurasia Business News, May 14, 2022
The Indian authorities imposed a ban on the export of wheat. An exception is made for deliveries under letters of credit issued before May 13, reported the Main Directorate of Foreign Trade of the India’s Ministry of Trade and Industry. The decision was made amid rising prices and wheat shortages.
India is one of the largest wheat producers in the world, but most of the production is directed to the domestic market. Several media sources earlier reported that the country plans to become the world’s leading exporter after Russia’s military operation in Ukraine and its consequences on the wheat market.
India’s harvest was set to reach record highs and Prime Minister Narendra Modi promised to “feed the world” by selling wheat to countries dependent on Ukrainian and Russian grain.
Read also : Wheat Prices Soar at $396 per ton
But this was without counting on global warming: the historic heat wave in March has ravaged the Indian wheat fields and should drop the harvest by more than 4% compared to last year, according to estimates. This deficit comes at a time when annual inflation of food prices in the United States have hit 10% in April.
The Indian government wants to keep Indian wheat for domestic consumption. Authorities decided to prohibit any further private exports, but reserves the right to sell it to countries that are in essential need.
Egypt and Turkey, so far customers of Ukraine, have already placed an exceptional order with India. Other African and Middle Eastern countries are also interested.
In Georgia, wheat stocks are virtually depleted, and mills will stop working in the coming days, as the country began to actively import flour. This was stated on Friday by Levan Silagava, Chairman of the Wheat and Flour Association of Georgia, in an interview with the Georgian news agency Interpressnews.
In Russia, the custom duty on wheat exports in the week from May 18 to May 24, 2022 will decrease to $ 111.9 per ton against $ 114.3 per ton earlier, announced the Ministry of Agriculture of the Russian Federation.
Blockade of Russian and Ukrainian exports because of the war and climate change explain the soaring wheat prices.
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