Wheat prices surge in European trading after India bans exports

WHEAT prices surged to a new record high in European trading yesterday after India decided to ban exports of the commodity as a heatwave hit production.

The price jumped to €435 (R7 335) per ton as the Euronext market opened, up from the previous record of €422 euros reached on Friday.

Global wheat prices have soared on supply fears since Russia’s February invasion of agricultural powerhouse Ukraine, which previously accounted for 12% of global exports.

The spike, exacerbated by fertiliser shortages and poor harvests, has fuelled inflation globally and raised fears of famine and social unrest in poorer countries.

India, the world’s second-largest wheat producer, said on Saturday that it was banning exports after its hottest March on record, with traders needing express government approval to enter into new deals.

New Delhi said the move was needed to protect the food security of its own 1.4 billion people in the face of lower production and sharply higher global prices.

Some parts of India have seen prices in wheat and flour jump 20 to 40% in recent weeks, Commerce Secretary

BVR Subrahmanyam said on Sunday. Because of the sharp rise in global prices, some farmers were selling to traders and not to the government.

This got the government worried about its buffer stock of almost 20 million tons – depleted by the pandemic – needed for handouts to millions of poor families and to avert a famine.

Export deals agreed before the directive issued on May 13 could still be honoured but future shipments needed government approval, it said.

However, exports could also take place if New Delhi approved requests from other governments “to meet their food security needs”.

India, which possesses major buffer stocks, previously said it was ready to help fill some of the supply shortages caused by the Ukraine war.

Last week India said it would send delegations to Egypt, Turkey and elsewhere to discuss boosting wheat exports. It was unclear whether these visits will now go ahead.

The export ban drew sharp criticism from the G7 nations, which said that such measures “would worsen the crisis” of rising commodity prices.

India recorded its warmest March on record which hit wheat producers in the country’s north. |