India bans Wheat Exports- Why?
After a blistering heatwave hampered yield and regional prices reached a record high, the world's second- largest producer of wheat banned private international deals of the crop on May 14. Following the release of this, global wheat prices soared.
The decision will assist in the regulation of retail wheat
and wheat flour prices, which have risen by a normal of 14- 20 in the last year,
as well as addressing the food grain requirements of neighbouring and
vulnerable nations.
The global market is down, prices of goods are high, energy
prices are high and there's also a global deficit of supply. This situation
started in March 2020 when the lockdown started due to the covid-19 pandemic
and this way two years went by just like that and earlier this year, Russia and
Ukraine war started and since then the market has been either down or stagnant,
more than stagnant it's heading downward.
Fear of delay in supply from the Black Sea region, which
accounts for 30% of world wheat exports, have grown as a result of Russia's invasion
of Ukraine. As a result, global wheat prices have reached a 14- year high.
India is presently the sole significant worldwide wheat
provider because of large surplus at home. Wheat exports are particularly
appealing to Indian exporters due to a rebound in world prices and a major drop
in the Indian rupee against the dollar.
Egypt, the world's largest wheat importer, decided for the
first time to buy the crop from India as inventories from Ukraine and Russia,
which together used to regard for roughly 29% of worldwide wheat exports, fell
short.
According to dealers, India also exported wheat to new market
such as Israel, Turkey, Indonesia, Mozambique, and Tanzania. They also
mentioned that the UN's World Food Programme acquired wheat from India for
Somalia, Kenya, and Djibouti. South Asia, Southeast Asia, the Middle East,
Europe, and North Africa have all received wheat from India.
According to a local New Delhi based dealer with a worldwide
trading firm, an increase in temperature in mid-March indicates the crop could
be around 100 million tonnes or lower.
India packed a record 7 million tonnes of wheat in the
financial year to March, over further than 250% from the last year, as a result
of an increase in global wheat prices following Russia's invasion of Ukraine.
In April, rising food and energy costs brought annual retail
inflation in India to an eight-year high, strengthening concerns that the
central bank will raise interest rates more aggressively.
Due to rising energy, labour, transportation, and packaging
costs wheat flour prices in India are also rising.
Wheat prices in India have reached new highs, with certain spot markets seeing
prices as high as 25,000 rupees ($320) per tonne, considerably above the
government's minimum support price of 20,150 rupees.
India exported a record1.4 million tonnes of wheat in April,
and contracts have been signed beforehand for about1.5 million tonnes in May.
Now only time will tell, what will be happen if India decides not to lift the
ban. Share your views in the comments section.
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Written by: Astha Singh; Class of 2021-2023
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