India has barred wheat shipments that the world was banking on to alleviate supply shortages caused by the Ukraine conflict, claiming that the country’s food security is jeopardized.
Exports would continue to be permitted to countries that require wheat for food security reasons and at the request of their governments, according to a notification issued by the Indian Directorate-General of Foreign Trade on Friday.
All additional shipments would be prohibited immediately.
The move to halt wheat exports reflects India’s concerns about increasing inflation, and it adds to a wave of food protectionism that has occurred since the conflict began. With agricultural prices on the rise, governments around the world are scrambling to safeguard local food supplies. Indonesia has halted palm oil exports, while Serbia and Kazakhstan have imposed grain limitations.
Limiting exports would be a setback for India’s hopes of capitalizing on the global wheat surge after the war disrupted trade flows out of the Black Sea breadbasket region. Importing countries have turned to India for supply, with key consumer Egypt recently approving India as an origin for wheat imports.
“We now have an environment with another supplier removed from contention in global trade flows,” said Andrew Whitelaw, a grains analyst at Melbourne-based Thomas Elder Markets, adding that he has been skeptical about the high volumes expected from India.
“The world is starting to get very short of wheat,” Whitelaw said.
At the moment, winter wheat in the United States is in bad condition, supplies in France are running low, and Ukraine’s exports are blocked.
According to Bloomberg News, a record-breaking heatwave has harmed wheat crops across South Asia, pushing the government to contemplate export limits.
Even though the government slashed predictions for India’s wheat production, the Indian Ministry of Consumer Affairs, Food, and Public Distribution claimed there was no need to prohibit exports. Shipments with irrevocable letters of credit that have already been issued will still be allowed, the latest notification said. Traders have contracted to export 4 million tonnes so far in 2022-2023, the food ministry said on May 4.
After Egypt, Turkey has also given the approval to import wheat from India, it said.
After the war hampered logistics in the Black Sea region, which accounts for about one-quarter of all wheat trade, India has tried to fill the vacuum. The country targeted to export a record 10 million tonnes in 2022-2023.
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