In order to make sure there is enough wheat in the country, the Indian government has put an immediate stop to the export of wheat.
The move comes at a time when people are worried that production won’t be as high as even the revised estimates of 105 million tonnes (mt).
In a notice sent out late last night, the Centre said that wheat prices have suddenly gone up due to “many factors” and that this puts the food security of India and other countries at risk.
Sources say that the ban was expected, especially after government officials said they were worried that only about 95 mt of wheat could be grown.
More than less wheat being made, people were worried about wheat prices going up around the world. A trade expert said that the Government probably moved quickly because the US Department of Agriculture said two days ago that there was a 35 mt wheat shortage around the world.
Concerns grew, even more, when the Food Corporation of India (FCI) bought less wheat to give out through the public distribution system. This was a very bad sign. As of May 13, the FCI had bought 17.9 mt of wheat, which was at least 50% less than the same time last year.
At least 5 mt of export contracts have been signed, and it is said that a lot of global trading houses have huge stocks that they got directly from farmers.
Sources from the government said that the Centre might look into giving wheat on a government to government basis.
The order to limit wheat exports also said that the move was made ‘to manage the overall food security of the country and to support the needs of neighbouring and vulnerable countries.’ The Centre was changing the foreign trade policy to make wheat a restricted item for exports instead of a ‘free’ item.
Only wheat with the proper paperwork, like Letters of Credit, will be allowed if they were done before May 13. Also, exports will be allowed with permission from the government, which suggests that it could be more of a government-to-government deal where India could help any country with food security issues.
The USDA said on Thursday that the amount of wheat, maize (corn), and soybeans are grown this year could all be less than last year. This is mostly because of the war between Russia and Ukraine. Both of these countries export a lot of wheat, corn, and sunflower oil, which is also in short supply and has caused the price of edible oils to skyrocket.
On Friday, the price of wheat on the Chicago Board of Trade hit its highest level in eight weeks, at $432.32 per tonne or $11.77 per bushel.
(inputs from news agency)