India has clamped down on wheat exports due to a predicted poor harvest, further fuelling concerns about possible global food shortages.
The world’s second largest producer of wheat had set a goal of exporting 10m tonnes of the grain in 2022-23.
However, a record heatwave has hit wheat production at a time when wheat prices are increasing due to the effects of the war in Ukraine, reports the Guardian.
Wheat price spike
Prices have risen more than 60% this year, driven up by disruption from Russia’s invasion of Ukraine. The two countries account for almost a third of the world’s wheat exports.
Following news of the ban from India, the benchmark wheat index rose as much as 5.9% in Chicago, the highest it has been in two months, reports the BBC.
Indian government officials said the ban was not permanent and could be revised.
It will allow exports backed by letters of credit that have already been issued, and to countries that request supplies “to meet their food security needs”.
Global production down
The FT reports that India’s export ban comes days after the US Department of Agriculture forecast that global wheat production would drop for the first time in four years in 2022-23.
The UN World Food Programme said this month that the war in Ukraine had exposed the fragility of global supply chains to sudden shocks, with serious consequences for food security.
In the UK, Bank of England (BOE) governor Andrew Bailey told MPs on the Treasury Select Committee that he is increasingly concerned about a further surge in food costs if Ukraine is unable to ship wheat and cooking oils from its warehouses because of a Russian blockade.
The governor said the Ukrainian finance ministry told him that it had food in store and was optimistic about crop planting, but was unable to export it “and it is getting worse”.
“That is a major worry. It is not just a major worry for this country, it is a major worry for the developing world,” he said.
Bailey also said he feels “helpless” in controlling inflation, reports the Telegraph.
“To forecast 10% inflation and to say there is not a lot we can do about 80% of it, I can tell you it is an extremely difficult place to be. We have to recognise the reality of the situation we face,” he said.