Corn from India eased the food crisis. Then he banned exports

“We already have enough food for our people, but our farmers seem to have made arrangements to feed the world,” Modi said. mentioned in April. “We are ready to send the rescuers tomorrow very.”

World’s second largest wheat producer after China was already talking about speech. In the 12 months to March, India took advantage of soaring world prices, exporting a record 7 million metric tons of grain. This is an increase of more than 250% compared to the volumes of the previous year. He had also set record export targets for the coming year.

Now those lofty goals have been abandoned and wheat exports banned as deadly heat waves in South Asia slow production and push local prices to record highs.

The move shocked international markets on Monday – especially as it came just days after India assured the world that the unprecedented situation Heat wave would not impact its export plans. Global wheat prices climbed 6%, with Chicago futures hitting $12.4 a bushel, the highest price in two months. Wheat futures prices fell slightly on Tuesday but are still up almost 50% since the start of the war.

But the alarm over its export ban highlights the fragility of global food supplies.

How did we come here?

Ukraine is among the world’s top five exporters of various key agricultural products, including corn, wheat and barley, according to the US Department of Agriculture. It is also the leading exporter of sunflower oil and flour.

But the food situation was tense even before the start of the fighting in Europe. Tangled supply chains and unpredictable weather – often the result of climate change – had already pushed food prices to their highest level in about a decade. Affordability has also been an issue after the pandemic left millions out of work.

After Modi’s pledge, many vulnerable countries were banking on supplies from India.

“Indian wheat exports are particularly important this year due to the Russia-Ukraine crisis,” Oscar Tjakra, senior grains and oilseeds analyst at Rabobank, told CNN Business.

The “ban will reduce the availability of world wheat for exports in 2022 and support world wheat prices,” he added.

On Monday, Ambassador Linda Thomas-Greenfield, the United States’ representative to the United Nations, said she hoped the Indian authorities would “reconsider this position”.

Rise of food protectionism

The government also said the restrictions do not apply “where prior commitments have been made by private traders” and to countries requesting supplies “to meet their food security needs”.

According to Tjakra, these exceptions should be seen as “good news”, but they make it difficult to assess the impact the ban will have on global trade.

The “severity of the impact” of the ban “will still depend on the export volumes of Indian wheat which are still allowed at the government level and the wheat production volumes of other global wheat producers”, he said. he adds.

Some analysts in India say allowing unrestricted exports was initially a bad idea.

“We don’t know what will happen to the climate in India,” Devinder Sharma, an India-based agricultural policy expert, told CNN Business.

India is among the countries expected to bear the brunt of the impacts of the climate crisis, according to the UN’s authority on climate change, the Intergovernmental Panel on Climate Change (IPCC).

If crops are ruined due to unpredictable weather, India could run out of food and find itself “standing with a begging bowl”, Sharma added.

India is not the only country looking inward and curbing agricultural exports.

“With inflation already on the rise in Asia, risks are skewed towards more food protectionism, but these measures could end up exacerbating food price pressures globally,” Nomura analyst Sonal Varma said on Saturday. .

She added that the impact of India’s wheat export ban “will be felt disproportionately by low-income developing countries”.

Bangladesh is India’s top wheat export destination, followed by Sri Lanka, the United Arab Emirates, Indonesia, Yemen, the Philippines and Nepal, Nomura said.