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Wheat: India bans the export of the grain

2022-05-14T13:10:17.206Z

India had actually announced that it would alleviate the global wheat shortage as a result of the Ukraine war. Now the authorities fear a shortage in their own country - and prohibit the export of the grain.



Enlarge image

Wheat delivery at a wholesale grain market in Amritsar (in April)

Photo: NARINDER NANU / AFP

India has imposed an immediate ban on wheat exports, fueling concerns about impending global famine caused by the war in Ukraine.

The government of the world's second-largest wheat producer said the export ban was intended to curb price increases in their own country.

India actually wanted to sell a record amount of around ten million tons of wheat on the world market this year.

An unusually early heat wave with temperatures well over 40 degrees in India had recently fueled concerns about a failed harvest.

On the world market, the export ban is likely to drive up prices further, since millions of tons of wheat are missing there due to the Ukraine war and the resulting lack of deliveries from the Black Sea region.

This would hit poorer countries in Asia and Africa particularly hard.

The Indian government announced that existing supply contracts would be fulfilled and that countries that would otherwise have to worry about "food security" would also be supplied.

However, the export of further quantities will be stopped.

According to the United Nations, almost 25 million tons of grain that has already been harvested cannot be taken out of the country due to the war in Ukraine.

In addition, the coming harvest will not be able to be maintained at the previous level.

At the end of the meeting with her G7 colleagues in Weissenhaus, Federal Foreign Minister Annalena Baerbock accused Russia of deliberately blocking the ports in Ukraine.

This is not collateral damage of the war, but a conscious decision.

There are no Western sanctions against grain.

Russia is waging a "grain or grain war," said Baerbock.

The Kremlin is trying to expand the Ukraine war in the world, especially in Africa.

Up to 50 million people in Africa and the Middle East are also threatened by hunger as a result of the crisis.

Federal Minister of Agriculture Cem Özdemir accused Russia on Friday of using hunger as a weapon of war.

This applies within Ukraine, but also worldwide, since Ukraine alone supplies half of the grain for the World Food Program.

Developments have pushed up wheat prices around the world, including in India, helped by sharp increases in fuel, labor and transportation costs there.

In addition, the heat wave in the region is causing the first crop failures.

As recently as February, the government had forecast production of more than 111 million tons, which would have been the sixth record harvest in a row.

In May, the forecast was capped at 105 million, and traders are not ruling out that farmers will eventually harvest less than 100 million tons.

India is the second most wheat producer after China.

In the past, the country's second most populous country with more than 1.3 billion people has exported little of it.

The government buys in large quantities in order to supply the poor population in the country, among other things.

Until now, farmers have had little incentive to sell to exporters because the government paid them a subsidized price that was higher than the world market price at the time.

fdi/Reuters

Source: spiegel

All business articles on 2022-05-14

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