The Directorate General of Foreign Trade has imposed a veto following the Ministry of Commerce’s intention to export 10 million tonnes of wheat in the current financial year due to rising grain prices that threaten the food security of the Asian country. In addition, higher temperatures in recent weeks have reduced the productivity of the harvest. The government will comply with the agreements already collected, but will not supply more grain to the world until further notice.
As of this Saturday, India has stopped “immediately implementing” wheat exports, except for a “non-refundable letter of credit”, the Directorate General of Commerce said in a statement on Friday night.
The letter alleged that the move was “based on the government’s commitment to food security in India, its neighbors and other vulnerable developing countries, which have been hit by sudden changes in the global market and are unable to obtain adequate supplies of wheat.” .
In that regard, the Indian administration would be empowered to grant special permission to countries at risk of food shortages if such a decision is made. “We do not want the wheat trade to be unregulated or hoarded,” said PVR Subramaniam, China’s trade secretary.
The embargo is triggered by a sharp rise in domestic prices, which has created a record inflation over the past eight years and hit the pockets of citizens.
War, inflation and heat wave in Ukraine are one of the reasons
The Russian-Ukrainian conflict also brought economic damage to India, such as rising wheat prices. As costs for labor, transportation, fuel and packaging increased, so did grain.
This, along with other foods, energy and oil, created national inflation of 7.79% in April, the highest level since May 2014.
“It’s not just wheat. Rising public prices have raised concerns about inflation, which is why the government had to ban wheat exports,” an Indian official told Reuters.
Moreover, the prevailing high temperatures in recent weeks have reduced the viability of the crops. The heat wave rose to 47 degrees, reducing yields in the fields.
The decision is aimed at using the harvest to guarantee the well-being of Indian citizens to avoid a food crisis in the country. However, officials made it clear that this was a preventative resolution, but that it could be repealed when deemed necessary.
It comes just days after the Commerce Ministry set a target of 10 million tonnes of wheat exports in the current financial year on Thursday, a record.
India is the second largest producer of wheat in the world
Data provided by the Directorate General of Foreign Trade shows that India achieved a record revenue of over $ 2,000 million, reaching seven million tonnes in wheat exports during 2021-2022.
According to the Ministry of Commerce, India is the second largest producer of wheat at 13.5% of world production. It bags about 107 million tons of grain, but most goes to meet domestic needs.
Government estimates in February exceeded 111 million tonnes, signaling the sixth consecutive record harvest, but in May they had to reduce the number to 105 million.
The absence of crops in the Black Sea region was canceled by the war between Russia and Ukraine, the countries that account for 30% of global exports of this grain, increasing the influence of New Delhi.
With EFE and Reuters
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