India Temporarily Stops Wheat Exports With Immediate Effect Amid High Price

Highlights:

  • India, the world’s second-biggest wheat producer witnessed a decadal high in wheat prices in April
  • The United Nations has been repeatedly raising concerns over an imminent food shortage
  • Wheat prices have surged to a record level, increasing 6.95% on year in April

India has temporarily barred wheat exports with immediate effect, in an attempt to limit local price rise. India, which is the world’s second-biggest wheat producer witnessed a decadal high in wheat prices in April a worrying development. The decision also comes amid an estimated large drop in output owing to severe heat waves and a rise in food prices.

The Directorate General of Foreign Trade (DGFT), “The export policy of wheat is prohibited with immediate effect.” The government statement comes as the Russia-Ukraine war enters the 12th week and the supply from the Black Sea has been restricted for nations amid the conflict. Notably, the United Nations has been repeatedly raising concerns over an imminent food shortage.

The government statement added, “Export will be allowed in case of shipments where an irrevocable letter of credit is issued on or before the date of notification. The export will be allowed on the basis of permission granted by the government of India to other countries to meet their food security needs and based on the request of the governments.”

Earlier, the country was hoping to export large quantities as the government had predicted a record output of 111 million tonnes of wheat in February. A month-long heatwave from mid-March shriveled the winter staple, compelling the government to cut production estimates by at least 5.7% to 105 million tonnes.

Wheat prices have surged to a record level, increasing 6.95% on year in April, which is a decadal high on the back of lower output and brisk buying by private traders at higher than government-ordained minimum support prices of Rs 2015 a quintal (100 kg) in anticipation of robust export demand.

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