India Wheat Export Ban: Why has India banned Wheat Exports? How has it affected Global Wheat Prices?

India Wheat Export Ban: Global wheat prices rose to record high on May 16, 2022 after India banned wheat exports. India is the world's second-largest wheat producer. The Indian government announced on May 13, 2022 that it was banning wheat exports after the intense heatwave curtailed production in the country and led to a record-high spike in domestic prices.

The global wheat price jumped to 435 euros ($453) per tonne as the European market opened. The global wheat prices have been rising due to supply fears since Russia's invasion of Ukraine on February 24. Ukraine, known as the agricultural powerhouse, accounted for 12 percent of global wheat exports. 

The rise in wheat prices combined with poor harvest and shortages in fertiliser have fuelled inflation globally and raised fears of famine and social unrest in poorer countries.

#UPDATE Wheat prices surged to a record high on Monday after India decided to ban exports of the commodity as a heatwave hit production pic.twitter.com/xKzXOZF46L

— AFP News Agency (@AFP) May 16, 2022

Read: Rise in Atta Prices Explained: Why Atta Prices in India are going up?

Why has India banned wheat export?

• The major reasons stated by the Indian government while temporarily banning wheat exports included lower production and sharply high domestic wheat prices. The domestic atta prices have jumped by almost 20-40 percent in recent weeks.
• Some of the farmers were selling to traders and not to the government due to a sharp rise in global wheat prices. This got the government worried as its buffer stock of almost 20 million tonnes was depleted by the pandemic
• The Indian Government said that it was worried about the food security of its own 1.4 billion people amid sharply high global wheat prices and possible famine. 
• The poorest population in India also relies on wheat as a daily staple food. The spike in domestic wheat prices and a global shortage could lead to a major shortage in India as well. 
• The government stated that they don't want the wheat to be exported in an unregulated manner as it may either get hoarded and not used for the purpose that they are hoping, which is serving the food requirements of vulnerable nations and vulnerable people.

India's Wheat Export Ban: 5 Key Points

1. The Indian government announced that wheat exporters could only enter into new export deals with express government approval.

2. All the wheat export deals agreed upon before May 13 when the directive was issued will be honoured but future shipments will require government approval.

3. India also stated that the exports could also take place if the government approved requests from other governments "to meet their food security needs".

4. India had previously said it was ready to help fill some of the supply shortages of wheat caused by the Russia-Ukraine war. 

5. India had also planned to increase exports in this financial year to 10 million tonnes from seven million tonnes.

Global Reaction to India's wheat export ban
The Group of Seven industrialised nations have reportedly criticised India's wheat export ban, saying that such measures "would worsen the crisis" of rising commodity prices.

India Heatwave 

India recorded its warmest March on record, which hit farmers in wheat-producing northern India. India has seen a scorching heatwave in recent weeks with temperatures going up to even 49 degrees Celsius in the national capital.