Economy

Food safety: India bans wheat exports | STERN.de

India is the second largest wheat producer in the world. Now politicians are ordering an immediate export ban. This will presumably cause the already fueled prices to rise further.

The world’s second largest wheat producer, India, has banned the export of the grain with immediate effect. The decision came amid sudden surges in global wheat prices, threatening India’s food security, the country’s export authority said late Friday night.

Only recently, India’s Prime Minister Narendra Modi and other representatives of the Indian government announced that they would help in the wake of the Ukraine war in view of an imminent shortage of wheat on the world market and export significantly more wheat. Ukraine and Russia are both major wheat exporters. Most recently, there were delivery bottlenecks and price increases due to the war. Indian wheat exporters have had export deals with countries like Egypt and Turkey since the war began, said Agricultural and Processed Food Products Export Development Authority chief Tarun Bajaj.

But then the current extreme heat in India intervened. This reduces the wheat harvest by almost six percent, according to the Department of Food & Public Distribution. Several economists also warned of a possible domestic wheat crisis.

India produces the second most wheat after China – around 100 million tons per year. So far, India has hardly exported any of it. The second most populous country with more than 1.3 billion people needs a lot of wheat itself. The government buys in large quantities in order to supply the poor population in the country, among other things. Until now, farmers have had little incentive to sell to exporters because the government paid them a subsidized price that was higher than the world market price at the time.

Source: Stern

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