Shortage fears loom
Farmers harvest wheat on the outskirts of Jammu in northern India. The country is considering restricting wheat exports as severe heatwaves have damaged crops, exacerbating tight global supplies after the war in Ukraine sent food inflation soaring.
India experienced its hottest March on record, shrivelling the wheat crop that the world was relying on to alleviate a global shortage. To safeguard domestic supplies, the government is considering limiting wheat exports, according to a person with knowledge of the matter.
Top officials were discussing the move and would recommend it to Prime Minister Narendra Modi, who would then make the decision, said the person.
There was no need to curb exports for now as the country had enough supply to meet domestic demand, Food Secretary Sudhanshu Pandey said at a briefing.
A finance ministry official did not answer calls, while the trade ministry did not immediately respond to an email seeking comment on the government’s plan to restrict wheat exports.
Benchmark wheat futures jumped by as much as 4.2 per cent in Chicago in the United States.
Curbing exports would be a hit to India’s ambition to cash in on the rally in global wheat prices after Russia’s war in Ukraine upended trade flows out of the critical Black Sea breadbasket region. Importing nations have looked to India for supplies, with top buyer Egypt recently approving wheat imports from the country.
The move would also add to a wave of crop protectionism around the world as governments seek to protect their own food supply amid soaring prices and fears of shortages. That has the potential to worsen global food inflation, which is already at a record and surging at a rampant pace.
One of the strategies, the Indian official said, could be setting a minimum export price to ensure wheat was not shipped overseas below that level. This way, without outrightly banning it, the government can boost domestic supply and keep a check on prices, according to the official.