India bans wheat exports to cool prices at home

TBP Desk
14 May 2022 11:10:16 | Update: 14 May 2022 12:52:52

File photo of a veiled woman farmer harvesting wheat crop in a field on the outskirts of Ajmer in Rajasthan — Reuters Photo

India has banned wheat exports with immediate effect as part of its steps to control the spike in prices at home.

Only export shipments for which letters of credit have been issued on or before yesterday's notification will be allowed, NDTV reports citing the government.

Additionally, the government will allow exports on requests from other countries, the notification issued by the Directorate General of Foreign Trade (DGFT) said.

The notification said that the government had taken the decision "in order to manage the overall food security of the country and to support the needs of the neighbouring and other vulnerable countries".

"(However), the government of India is committed to providing for the food security requirements of India, neighbouring and other vulnerable developing countries which are adversely affected by the sudden changes in the global market for wheat," the DGFT said.

India’s ban is likely to drive global food prices, which have risen to record levels due to a void in wheat supplies after Russia’s war on Ukraine.

File photo of labourers shifting wheat crop from a trolley to remove dust from the crop at a wholesale grain market in Chandigarh, India — Reuters Photo

The move to ban wheat exports comes after huge crop loss due to a heatwave in March. The government is also under pressure to rein in inflation that surged to 7.79 per cent in April.

Hindustan Times reports that earlier, Prime Minister Narendra Modi, during his recent visit to Germany had said “India was ready to feed the world” by exporting its surplus stocks.

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After five consecutive years of record harvests, India cut its wheat output forecast to 105 million tonnes from a February estimate of 111.3 tonnes after the heatwave hit crop yields.

Earlier this month, local media quoted Sudhanshu Pandey, India's food secretary, as saying that wheat production was expected to fall at least five per cent this year from 110 million tonnes in 2021.

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But he added: "I don't see any controls on exports."

Last month, Commerce and Industry Minister Piyush Goyal said India would export 10 million tonnes of wheat, up from seven million, this financial year -- beginning in April.