India bans wheat exports. The ban will take effect
immediately from Saturday (May 14, 2022). A few days ago, the country had
promised to export a record amount of wheat. It is feared that the price of
wheat may go up in the world market due to the new decision.
Wheat production in India has come down this time due to
intense heat. Wheat prices have reached record highs in the local market amid huge
export-demand. In the meantime, the decision to ban exports came.
However, the government said that there is an opportunity
for export as opposed to the letter of credit (LC) already issued for export.
In addition, requests from neighboring countries seeking to "meet their
own food security needs" will be considered.
Russia invaded Ukraine in late February. As a result, global
buyers have been relying on India, the world's second-largest wheat producer,
as exports from the Black Sea region plummeted. Prior to the ban, the country
had set a target of exporting 10 million metric tonnes of wheat this year.
Wheat prices will reach new heights in the global market due
to India's export ban. Poor consumers in Asia and Africa will suffer.
"Export bans are very disappointing," said a Mumbai-based dealer who
has been doing business with global corporations. We expected that after two to
three months, restrictions on exports would come. But with the rise in
inflation, the attitude of the government has changed. '
Inflation in India hit an eight-year high in April due to
rising food and fuel prices. This reinforces the notion that economists need a
more aggressive role for the central bank in raising interest rates to control
prices.
Wheat prices in India hit record highs in some spot markets,
wheat is now priced at Rs 25,000 per tonne (about USD 322). On the other hand,
the government fixed the minimum support price at Rs 20,150.
India exported a record 1.4 million tonnes of wheat in April
and another 150 million tonnes was signed in May.
|Source: Online/SZK
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