New Delhi: Global wheat prices leapt a record 6% on Monday following India’s decision to restrict overseas sales of the staple, exacerbating a global food crisis, trading data showed. The world was banking on India to alleviate wheat supplies crimped by the Ukraine war.
The country’s move to ban overseas sales will worsen a global food shortage and could drive up prices even more, analysts said. According to reports, wheat futures traded in Chicago Board of Trade, a global benchmark, rose 5.9% to $12.47 a bushel (about 27 kg), touching a two-month high, while overall prices of the staple have risen more than 60% this year on the back of disruptions due to the Ukraine war.
Russia and Ukraine account for almost a third of the world’s total wheat exports. India was hoping to export large quantities as the government had forecast a record output of 111 million tonne of wheat in February. A heatwave from mid-March shriveled the winter staple, forcing the government to cut production estimates by at least 5.7% to 105 million tonnes.
The decision appeared to raise hackles, with the G7 countries appearing to criticise India’s decision in a statement on Saturday. India exported a record 7.85 million tonnes in the fiscal year to March, up 275% from a year ago. Before the export ban took effect, the country had already contracted to export 4.5 million tonne as the government sought to ramp up overseas sales.
These sales are expected to go through if formalities, such as letters of credit, have been issued, according to the government’s notification curbing export. In April 2022, the country’s traders sold 1.4 million tonne overseas, taking advantage of high global demand and prices.