Wheat prices rise in international markets due to India’s ban on exports, Ukraine war: FAO
Wheat prices have risen in international markets following India’s ban on exports of the staple cereal and due to reduced production prospects in Ukraine following the Russian invasion, according to the UN Food agency. In May 2022, the Food and Agriculture Organization (FAO) Price Index averaged 157.4 points, down 0.6% from April.
However, the index, which tracks monthly changes in a basket of commonly traded food commodities, remained 22.8 percent higher than in May 2021. In May, the FAO Cereal Price Index averaged 173.4 points, up 3.7 points (2.2%) from April and up to 39.7 points (29.7%) from its May 2021 value.
‘International wheat prices rose for the fourth consecutive month, up 5.6% in May, to average 56.2 percent higher than last year’s value and only 11 percent lower than the record high reached in March 2008,’ it said on Friday.
‘The sharp increase in wheat prices was in response to India’s export ban, which came amid concerns about crop conditions in several major exporting countries, as well as reduced production prospects in Ukraine due to the war,’ it said.
Crop conditions have improved
In contrast, international coarse grain prices fell by 2.1% in May but remained 18.1% higher than a year ago. Maize prices fell 3.0 percent due to slightly improved crop conditions in the United States, seasonal supplies in Argentina, and the impending start of Brazil’s main maize harvest, but they remained 12.9% higher than their level in May 2021, according to the report.
In May, international rice prices rose for the fifth month in a row. Quotes rose in all major market segments, but monthly increases were the smallest (2.6%) for the most widely traded Indica varieties, owing to ample supplies, particularly in India, it said.
The FAO Sugar Price Index fell 1.1% from April to May, as a bumper crop in India boosted global availability prospects. The depreciation of the Brazilian real against the US dollar, combined with lower ethanol prices, put additional downward pressure on global sugar prices.
‘The FAO Sugar Price Index averaged 120.3 points in May, down 1.3 points (1.1 percent) from April, marking the first decline after two months of sharp increases,’ the agency said. ‘The recent monthly decline in international sugar price quotations was triggered by limited global import demand and good global availability prospects, primarily due to a bumper crop in India,’ the report stated.
Last month, India announced a ban on wheat exports in an effort to keep prices under control amid concerns that the scorching heat wave would reduce wheat output. Wheat exports were permitted based on permission granted by the Indian government to other countries to meet their food security needs and on their governments’ requests.
‘Determined to assist’
V Muraleedharan, Minister of State for External Affairs, told the Ministerial Meeting on ‘Global Food Security Call to Action,’ chaired by US Secretary of State Antony Blinken during the US Presidency of the UN Security Council in May, that India is ‘committed to ensuring that such adverse impact on food security is effectively mitigated and the vulnerable cushioned against sudden changes in the global market.’
‘We have announced some measures regarding wheat exports on 13 May 2022 in order to manage our own overall food security and support the needs of neighboring and other vulnerable developing countries,’ Muraleedharan said.
‘Let me be clear: these measures allow for export based on approvals to countries that are required to meet their food security demands.’ This will be done at the request of the relevant governments. ‘Such a policy will ensure that we truly respond to those in need,’ he added, emphasizing that India will play its proper role in advancing global food security.