Wheat prices surged to a new record high after India decided to ban exports of the commodity as a heatwave hit production. The price jumped to EUR 435 (USD 453) per tonne as the European market opened.
Global wheat prices have soared on supply fears since Russia’s February invasion of agricultural powerhouse Ukraine, which previously accounted for 12 percent of global exports – as per the report published by AFP.
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The spike, exacerbated by fertiliser shortages and poor harvests, has fuelled inflation globally and raised fears of famine and social unrest in poorer countries.
India, the world’s second-largest wheat producer, said that it was banning exports after its hottest March on record. New Delhi said factors including lower production and sharply higher global prices meant it was worried about the food security of its own 1.4 billion people.
Export deals agreed before the directive issued on May 13 could still be honoured but future shipments needed government approval, it said. However, exports could also take place if New Delhi approved requests from other governments “to meet their food security needs”.
India, which possesses major buffer stocks, previously said it was ready to help fill some of the supply shortages caused by the Ukraine war. The export ban drew sharp criticism from the Group of Seven industrialised nations, which said that such measures “would worsen the crisis” of rising commodity prices. Also, wheat importers in Asia were scrambling to find new sources of supply on after India banned exports of the grain at the weekend in a bid to keep a lid on soaring domestic wheat prices.
Importers, especially those in Asia, were banking on wheat from India, the world’s second-biggest producer, after exports from the Black Sea region plunged following Russia’s invasion of Ukraine.
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Russia and Ukraine jointly account for about 30% of global wheat exports. Ukraine’s exports are severely hampered because the war has forced it to close its ports, while Russia’s exports have been hit by Western sanctions.