India has banned wheat exports as grain prices have jumped this year partly due to the Russian-Ukrainian war.
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India has banned wheat exports, becoming the latest country to do so as grain prices have surged this year in part due to the Russia-Ukraine war.
The war triggered a huge spike in wheat prices, with Russia and Ukraine being among the biggest wheat exporters. The two countries account for 29% of global wheat exports, according to the World Bank.
Wheat prices climbed about 6% on Monday after India’s weekend announcement.
“With food prices already high due to COVID-related supply chain disruptions and drought-reduced yields last year, Russia’s invasion came at a bad time for global food markets” , said the Peterson Institute for International Economics (PIIE), a Washington DC-based think tank, in an April note.
Russia and Ukraine are among the world’s top five exporters of many important grains and oilseeds, such as barley, sunflower and sunflower oil, as well as corn, according to the PIIE.
India is not alone. Besides Russia and Ukraine, Egypt, Kazakhstan, Kosovo and Serbia have also banned wheat exports.
Inflation and fears for food security
And it’s not just wheat. Many countries also implemented a ban on other food exports as global inflation soared following the Ukraine crisis.
Prices have soared for a wide variety of other food items, contributing to rising inflation around the world. Some of these products include sunflower oil, palm oil, fertilizers and cereals.
In addition to rising food prices, the supply of many food products is also uncertain.
Ukraine has been unable to export grain, fertilizer and vegetable oil, while the conflict is also destroying cultivated fields and preventing a normal planting season. The government also accused Russia of stealing several hundred thousand tons of grain and reselling it. The Russian Foreign Ministry did not immediately respond to CNBC’s request for comment.
“As the war continues, it is increasingly likely that food shortages, particularly of grains and vegetable oils, will become acute, leading more countries to turn to trade restrictions,” the analysts wrote. from PIIE Joseph Glauber, David Laborde and Abdullah Mamun.
Over the weekend, the Group of 7 industrialized nations issued a warning of the risk of a world hunger crisis unless Russia lifts a blockade on Ukrainian grain currently stuck in Ukrainian ports, according to the Financial Times.
Countries banning food exports
Here is a list of countries that banned food exports in the months after the start of the Russian-Ukrainian war, according to a live tracker developed by the PIIE.
Source: Peterson Institute of International Economics
India said it was banning wheat exports “to manage the country’s overall food security”, according to local media.
Other countries that have recently implemented food export bans include Indonesia, which has restricted exports of palm oil, a key ingredient used in many food and non-food products.
Like India, Indonesia spoke of the need to ensure food availability domestically, after global food inflation reached post-war record highs. Indonesia represents more than half of the palm oil supply.