India’s curbs on wheat exports threaten to send global food prices higher

Indian wheat usually goes to Bangladesh, Sri Lanka, the United Arab Emirates and Indonesia. New Delhi has said it will consider exports to needy nations

The decision to halt wheat exports came as a record-breaking heatwave parched India’s crop during a crucial period, spurring estimates of slumping yields

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An Indian farmer carries a wheat crop harvested from a field on the outskirts of Jammu, India. Photo: AP

Published: 4:54pm, 15 May 2022Updated: 9:10am, 16 May 2022

India’s move to restrict wheat exports is set to reverberate through global agricultural markets, exposing just how tight global supplies are amid the war in Ukraine and threatening to drive up food prices even more.

However, New Delhi said on Sunday that it would keep a window open to export wheat to food-deficit countries at the government level despite restrictions announced two days earlier.

India’s Commerce Secretary BVR Subrahmanyam told reporters the government will also allow private companies to meet previous commitments to export nearly 4.3 million tonnes of wheat until July. India exported 1 million tonnes of wheat in April.

Labourers separate grains of wheat from the husk at a wholesale grain market on the outskirts of Amritsar, India. Photo: AFP

The government said in a notification dated May 13 that it will suspend overseas sales to manage its food security. This drew criticism from the agriculture ministers of the Group of Seven nations, who said that such measures make the world’s crisis worse.

Surprisingly, India is not even a prominent exporter on the world stage. The fact that it could have such a major impact underscores the bleak prospect for global wheat supplies. War has crippled Ukraine’s exports, and now droughts, floods and heatwaves threaten crops in most major producers.

“If this ban occurred in a normal year the impact would be minimal, but the loss of Ukraine volumes exacerbate the issues,” said Andrew Whitelaw, a grains analyst at Melbourne-based Thomas Elder Markets.

India’s decision to halt wheat exports came as a record-breaking heatwave parched the crop during a crucial period, spurring estimates of slumping yields. The output risk created a dilemma for India, which has tried to fill the gap as the shortfall in Ukraine’s exports push buyers toward alternative origins.