INDIA PULLS WHEAT, RICE OFF THE GLOBAL MARKET
With global wheat prices soaring due to Russia’s blockade of top wheat exporter Ukraine’s Black Sea ports, India appeared poised to help fill some of that void on the global market. “We already have enough food for our people, but our farmers seem to have made arrangements to feed the world,” India Prime Minister Narendra Modi proclaimed in April 2022. But just a few weeks later, the Indian government abandoned its plan for increased foreign shipments and instead issued a ban on wheat exports. Oscar Tjakra said India officials reversed course as “a result of a smaller-than-expected marketing year 2022-23 wheat harvest, rising food inflation and low government wheat procurement under its MSP program, which affect the government’s ability to supply wheat under its domestic food assistance program.”
“Despite banning wheat exports, Indian domestic wheat prices still increased in 2023,” Tjakra said. “Domestic wheat prices in India reached their highest point in nearly eight months in September 2023.”Food inflation, which accounts for nearly half of the overall consumer price basket in India, rose 6.56% in September as compared with 9.94% in August. September inflation was above the Reserve Bank of India’s (RBI) upper tolerance band of 2% to 6%.
India typically accounts for around 40% of world rice trade. But the recent spike in food prices has led the Indian government to ban exports of non-basmati rice and include a 20% duty on parboiled rice exports. The ban impacts 7 million to 8 million tonnes of Indian rice exports, or 15% of global rice trade. Countries like Bangladesh, Sri Lanka, United Arab Emirates, Yemen and the Philippines are among the nations that heavily depend on shipments of wheat from India. And the rice export ban, which was announced in August, has contributed to a spike in global rice prices. The United Nations’ Food and Agricultural Organization’s All Rice Price Index in September fell by 0.5% month-on-month but was still 28% higher than the same month in 2022.
(Link: WorldGrain)
