India bans wheat exports due to heat wave | agricultural business

The government said it would continue to allow exports, backed by letters of credit already issued, as well as to countries requesting supplies “to meet their food security needs”.

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Government officials told a news conference that the measure was not final and could be modified.

Despite this, G7 agriculture ministers criticized the decision and said the move would “exacerbate the crisis” of global grain supplies caused by the war in Ukraine.

“If everyone starts to restrict their exports or close their markets, the crisis will worsen and this will also harm India and its farmers,” German Minister Jim Ozdemir said after a meeting with representatives of the group in Stuttgart.

“We urge India to assume its responsibilities as a member of the G20,” he added.

Global buyers were betting on supplies from the world’s second-largest wheat producer after exports from the Black Sea region plummeted after Russia’s invasion of Ukraine on Feb. 4. Before the ban, India had aimed to ship 10 million tons this year.

Officials added that there has been no significant drop in wheat production this year, but unregulated exports have pushed up domestic prices.

Rising food and energy prices pushed India’s annual retail inflation close to an eight-year high in April, bolstering expectations that the central bank will raise interest rates more aggressively.

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Wheat prices in India have soared to record levels, reaching in some spot markets as high as 25,000 rupees ($320) per ton, well above the government’s minimum price of 2,050 rupees.

In February, the government expected a production of 111.32 million tons, the sixth consecutive record crop, but it lowered the forecast to 105 million tons in May.

A trader in New Delhi says warmer temperatures in mid-March mean the crop could reach around 100 million tonnes or even less.