India being the Second largest wheat producer has recently banned the wheat export with immediate effects. To control the rise in domestic prices, India has stopped the export despite of large trade profits. India ensures to prioritize its own needs more than its trade benefits.
Circumstances
The Russia and Ukraine conflict has affected the trade system of many countries. Because of Russia’s invasion in Ukraine, global wheat prices have soared by more than 40% since the beginning of the year.
Ukraine and Russia exported a third of the world’s wheat and barley before the war. Ukraine’s ports have been closed since Russia invaded on February 24, and civilian infrastructure and grain silos have been devastated.
The reasons
India yields a large amount amount of wheat. Actually India consumes most of what it actually produce. India’s wheat harvest has been hampered by a scorching wave that has broken all previous records.
India had established a goal of exporting 10 million tonnes of wheat in 2022-23, hoping to take advantage of global wheat supply interruptions caused by the war. India is discovering new markets for its wheat export in Africa, Europe, and Asia.
The government was hopeful, estimating that production would reach an all-time high of 111.32 million tonnes. However, a rapid and unexpected rise in temperatures in midof March illustrated that India’s crop size would be lesses than what was expected. Over 122 years, India records its hottest March in 2022.
According to the administration, exports might still happen, of New Delhi approves a request from other governments to address their food security needs. Egypt is already in discussions with the Indian authorities on lifting the export ban. The administration has also stated that the ban on international shipments is temporary and that it may be changed in the future.
Commerce Secretary BVR Subrahmanyam stated that there is no wheat supply issue in the country. It’s a calculated measure to keep a check on domestic prices.
Criticism
Some countries have criticised India’s decision to ban wheat exports at a time when prices are already soaring. Agriculture ministers will also “recommend” that the matter be discussed at the G7 summit in June in Germany.
