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Amid high demand, India bans wheat exports after heatwave hurt crops

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India bans wheat exports

Photo: CNN

Indian wheat exports have been banned by authorities after prices for the crop skyrocketed due to a heatwave that greatly impacted production. The news was announced late evening on Friday, amid increasing wheat demand in the global market.

Millions of tonnes worth of India’s wheat exports go to other countries every year. The country is a major player in global wheat trade, with buyers depending on their shipments every year. India is considered the second largest exporter of wheat in the global market. The recent happenings in the nation have curtailed wheat shipment plans.

The authorities are projecting that almost 10 million tonnes will be shipped due to high demand. However, recent events have caused them some setbacks, which they’re working around at the present time with no estimates yet on when the ban will be lifted.

The government guaranteed that they would honor all exports already issued to dealers before the ban was announced. Indian authorities also said they will continue shipping wheat to countries to “meet their food security needs.”

Amid Russian-Ukraine tension, the global wheat trade supply chain has been affected. Many depend on India for the supply as the second-largest wheat exporter globally.

Wheat prices in India have been spiking recently, with some markets going up to 25,000 Rupees or $322.71 per tonne—a stark difference from the government’s fixed minimum price of 20,150 Rupees.

A Mumbai-based dealer described the recent ban as “shocking.” Moreover, the unprecedented move is counterproductive to the goal of the Indian wheat market to curb high global demand within 2-3 months.

Heatwave in India caused crops to ‘shrink’

In April, India’s weather department has forecasted an increase in temperature in some parts of the country, expecting areas to experience temperatures 8 degrees Celsius above average. A heatwave in India, as per the India Meteorological Department, is declared when the temperature exceeds 4 degree Celsius above normal.

In India, the summer months — April, May and June — are always the aridest. But this year’s heatwave came early; this caused problems with crop production, irrigation, and overall health of crops. The country’s temperature records show that March was one of the hottest since 1901.

Heat waves are hitting more Indian states. The Indian Institute of Technology’s Water and Climate Lab has found that there will be an increase in heatwave occurrence every year. “They’re unavoidable,” said Vimal Mishra at IIT-WCL.

India has been looking to expand its export opportunities in various countries, but this plan has been put on hold with the recent heatwave. The delegations were scheduled to travel to countries like Indonesia, Morocco, Tunisia, and the Philippines.

Local farmers reported that because of the heatwave, their production became less than usual; therefore, the supply went down. Indian markets were quick to react and charged higher prices for wheat retail. Due to the response from citizens, the government initiated the ban, saying it was to ease prices and avoid conflict among buyers and dealers.

Buyers are on the lookout for the ban lift as they heavily depend on India’s wheat supply.

Based in LA, Donna Barts is a senior repoter for Kivo Daily. She primarily covers entrepreneurs.

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