Ukraine war and climate change: Wheat price at all-time high

Created: 05/16/2022, 16:46

By: Patrick Freiwah

Wheat harvest in a field in North Rhine-Westphalia: The price of wheat is skyrocketing.

© Martin Wagner/Imago

The wheat price has hit another high.

The trigger for the latest increase is the current heat wave in India - and the government's radical reaction.

New Delhi/Munich - Pandemic, climate change, war: Global trade is facing a severe test.

Inflation is also rising happily due to various crises, it is also a failure of the ECB, as top economist Hans-Werner Sinn explained to us in an interview.

In particular, rising prices for natural resources pose serious problems for people around the world.

The wheat price, which was already high due to the Ukraine war, is being pushed up further by the heat wave in India.

In European trading on the Euronext stock exchange, a ton of wheat reached 435 euros on Monday.

This is a new record high, after three days earlier 422 euros for a ton of bread grain was the highest mark to date.

The background to the price increase is an Indian export ban on wheat.

The Asian country is the second largest wheat producer in the world and has huge reserves.

Last year, 2021, it was almost 110 million tons.

It is a measure due to climate change.

India is suffering massively from the consequences of scorching heat:

Wheat price continues to rise - India imposes export ban

The country, which has a population of 1.4 billion, recorded the warmest March since records began.

Temperatures of up to 45 degrees Celsius have been measured in recent weeks.

This affects the harvests, the yield estimate for 2022 had to be revised downwards by at least five percent.

With the export ban on wheat, the government initially wants to ensure security of supply in its own country.

Exports are still possible, but explicit permission is required.

Unlike Ukraine and Russia, India is not yet a major wheat exporter for the world market.

The majority of the harvest is used to supply the local population and neighboring Bangladesh.

However, the situation has changed with the Ukraine conflict: there has been a shortage of wheat on the world market, which is why India has recently become increasingly important when it comes to helping countries that are particularly dependent on imports from Ukraine or Russia .

The country had originally promised that it would be able to alleviate the global supply bottlenecks that arose in the course of the conflict between Ukraine and Russia, which are being further driven by price increases for fertilizer and energy, by increasing its wheat exports to around ten million tons .

However, this is not happening at the moment, which immediately drives up the wheat price development.

As a result, consumers also have to deal with increased costs for bread and baked goods.

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Wheat price at record high: India fears shortage and famine

In India itself, inflation has recently risen significantly.

In some places, the prices for wheat and flour have recently increased by 20 to 40 percent, according to the Department of Commerce.

In addition, some farmers sold to traders and not to the government because of the sharp rise in prices on world markets.

The rising grain prices have also been the subject of debate in Germany for some time.

Green politician Cem Özdemir is campaigning for more wheat cultivation in Germany - and accepts environmental damage in return:

New Delhi is therefore particularly concerned about the country's buffer stock of around 20 million tons, which is intended to avert a possible famine, but which was recently largely used up as a result of the Corona crisis.

Energy prices in particular are rising as a result of the Ukraine war.

But wheat is also becoming increasingly expensive.

This applies particularly to bakers.