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India wheat export ban fuels food concerns

By CHEN YINGQUN | China Daily Global | Updated: 2022-05-17 09:55

An Indian farmer poses as he harvests wheat crop in a field on the outskirts of Amritsar, in the northern Indian state of Punjab, on April 12, 2022. [Photo/Agencies]

India's ban on wheat exports has renewed global concerns about rising food prices and could add to the woes of food-deficit countries since the onset of the Russia-Ukraine conflict.

The world's second-largest wheat producer banned wheat exports without government approval on Friday as a heat wave hit production and domestic rising prices. All export agreements inked before the announcement would still be honored, but all shipments in the future will need the government's approval.

India's Directorate General of Foreign Trade said on Friday that a spike in global wheat prices was threatening the food security of India and neighboring and vulnerable countries. Its key aim of banning wheat exports is to control rising domestic prices.

The decision drew sharp criticism from the Group of Seven countries' agriculture ministers meeting in Germany, as the ministers urged countries not to take restrictive action and called for "markets to be kept open".

"If everyone starts to impose export restrictions or to close markets, that would worsen the crisis," said German Agriculture Minister Cem Ozdemir at a news conference in Stuttgart.

"We call on India to assume its responsibility as a G20 member."

India said on Sunday that it would keep a window open to export wheat to food-deficit countries at the government level.

Global wheat prices have risen due to fear of scarcity and supply disruptions after the Russia-Ukraine conflict began on Feb 24. Wheat exports from the two countries accounted for about 30 percent of the global market last year.

India previously said it was ready to help fill some of the supply shortages caused by the Russia-Ukraine conflict and has set a goal of exporting 10 million metric tons of the grain in 2022-23 and finding new markets for its wheat in Europe, Africa and Asia.

Heat wave adds uncertainty

However, as food prices continue to rise, India experienced its hottest ever March and has been hit by a heat wave in recent weeks, greatly affecting agricultural production.

India's Commerce Secretary BVR Subrahmanyam said on Sunday that the country's wheat production has been reduced by 3 million tons this year, from 106 million tons the previous year. Meanwhile, its domestic wheat prices have increased by 20 to 40 percent since the beginning of the year.

Monika Tothova, an economist with the United Nations' Food and Agriculture Organization, said the COVID-19 pandemic and the Russia-Ukraine conflict have triggered global rising food prices, which hit particularly hard in vulnerable countries, and food protectionism will make their situation worse.

She said high prices will tempt some countries to restrict exports of food commodities "either to address domestic inflation problems and consumer prices, or due to a panic of food scarcity".

She suggests they not do so, as such measures will just further aggravate the global food situation. For instance, during the 2008 global food crisis, many countries made food trade restrictions, which led to even higher prices and exacerbated food insecurity.

Li Yonghui, a Russian studies researcher at the Chinese Academy of Social Sciences, said as food price inflation grows around the world with no quick resolution to the Ukraine crisis in sight, more countries may follow in imposing export restrictions.

Protectionism moves in the agricultural sector would further worsen the food insecurity situation in countries that are economically backward and have no marginal food supplies, especially some African countries and Middle East countries, she added.

Agencies contributed to this story.

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