5
Business News Mon, 16 May 2022

Global wheat prices jump after India export ban

The price of wheat has jumped on international markets after India banned the export of the staple cereal.

The benchmark wheat index rose as much as 5.9% in Chicago, the highest it has been in two months.

The export ban comes after a heatwave hit India's wheat crops, taking domestic prices to a record high.

Wheat prices have soared by around 60% on world markets this year, pushing up the cost of everything from bread to noodles.

India's government said it would still allow exports backed by letters of credit that have already been issued, and to countries that request supplies "to meet their food security needs".

Government officials also said the ban was not permanent and could be revised.

However, the decision has been criticised by agriculture ministers from the Group of Seven (G7) nations meeting in Germany.

"If everyone starts to impose export restrictions or to close markets, that would worsen the crisis," German food and agriculture minister Cem Ozdemir said.

The G7 is an organisation of the world's seven largest so-called "advanced" economies, which dominate global trade and the international financial system. They are Canada, France, Germany, Italy, Japan, the UK and the United States.

Although India is the world's second-biggest wheat producer, it has not previously been a major exporter as most of its crop is sold on domestic markets.

But Ukraine's wheat exports plunged after the Russian invasion. And with droughts and floods threatening crops in other major producers, commodity traders were expecting supplies from India to make up for part of the shortfall.

Before the ban, India had aimed to ship a record 10 million tonnes of wheat this year.
Source: classfmonline.com