India announced an immediate halt to most wheat exports, a sharp reversal in policy that will hit global wheat supplies already squeezed by the Russia-Ukraine war and risk exacerbating food insecurity in countries dependent on food imports.
India said the action is intended to control rising domestic wheat prices, which have jumped 10% since Russia invaded Ukraine in February, Gro’s domestic Indian price data shows. Global wheat prices have gained even more, with CME wheat futures up 46% from February and up 59% from a year ago. Prices jumped nearly another 6%, closing limit-up, in Monday trading.
The move parallels export restrictions by other countries seeking to control domestic prices of various commodities, such as Russian partial ban on wheat exports and Indonesian recent ban of palm oil exports.
A halt to India’s wheat exports represents an about-face for the government. Officials had repeatedly issued assurances that the country would help fill the gap resulting from the Russia-Ukraine war, even after a late-season heat wave reduced what had been forecast to be a record wheat harvest.
Punjab, India’s largest wheat producing region, recorded some of the highest daily temperatures in at least 40 years in March and April. The damage to wheat yields would have been worse had the crop not already been at a mature stage. Current soil moisture conditions are still the driest they’ve been in more than a decade, as shown by Gro’s Climate Risk Navigator weighted for India’s wheat growing areas.
The export ban will especially impact import-reliant countries in need of additional wheat supplies as shipments from the Black Sea region are curtailed. Bangladesh and Sri Lanka, for example, normally import wheat from India, as well as from Russia and Ukraine. A cutoff of Indian wheat could leave these and other countries scrambling for alternative supplies, although India said it will consider individual countries’ requests to waive the export ban.
The export ban also represents a setback for India’s objective to take on a greater role in world agricultural exports. The country is the world’s second-largest producer of wheat, but historically has only exported grain when harvests are plentiful. This year, a bumper wheat crop was expected and export estimates had increased steadily as the season progressed. India’s government didn’t say how long the export ban will continue, and the move has already upset farmer groups that had hoped to take advantage of high global wheat prices.