India’s wheat export ban made the global food market even more unstable: at WTO
India’s ban on wheat exports has been criticized again at the WTO’s first agriculture meeting after the Ministerial Conference in Geneva. Seven members, including the US, the EU, the UK, Japan, and Canada, said that the ban had made the global food market even more unstable.
A trade official in Geneva said that they also said the ban might not be necessary based on production predictions for 2022 and 2023 made by institutions like the US Department of Agriculture.
In defense of its decision to limit exports, India said that the global price hikes were mostly caused by the actions of large buyers and that it wasn’t fair to blame it for the same because it wasn’t a big wheat exporter.
India also said that wheat prices went back to where they were before the measure was made public a week after it was announced. The seven countries, which included Brazil and Paraguay, said that global wheat prices shot up by 6% on the first day of trading on the Chicago Board of Trade wheat futures after India said it would stop exporting wheat on May 13, 2022. This was New Delhi’s response.
‘The Group of Seven said they didn’t think a ban on wheat exports was necessary because several organizations, including the USDA, predict that India will produce almost 100 million tonnes of wheat in 2022-23 (April-March), which is a lot more than the average annual production of 96 million tonnes in the five years leading up to 2020,’ BusinessLine sources said.
After an out-of-season heat wave hurt the crop and drove up prices in India, New Delhi stopped wheat exports. The Agriculture Ministry says that India will produce about 106.41 mt of wheat in the crop season that ends in June 2021-22. This is 3.8 mt less than last year’s output. It is also less than the 111.32 mt that was predicted for 2021-22. It is, however, 2.53 mt more than the average of 103.88 mt for the last five years.
Ban on exports hurts
At a meeting of the WTO’s Committee on Agriculture, the US said that India’s export ban hurt Bangladesh because Bangladesh used to pay less than $400 per tonne for Indian wheat but now has to buy it from sellers who charge more.
Japan reminded India of the new MC12 declaration on food security, which stated again how important it is to keep trade going. Thailand, on the other hand, insisted that India explain how long it planned to keep the ban in place.
‘The official said that India said it would announce a policy with specifics when the time was right. It also said that the conditions for implementing the current measure were explained in a notification from the Directorate General of Foreign Trade in May 2022.’
Before the heat wave hit, India planned to export a record 10 mt of wheat in 2022-23, up from 7.86 mt the year before.