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India halts wheat exports, says food security is at risk

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Sat, 2022-05-14 22:01

NEW DELHI: India has banned wheat exports that the world was counting on to alleviate supply disruptions sparked by the war in Ukraine, saying that its own food security is threatened by a sudden spike in global prices of the grain.

The South Asian nation is the world’s second-largest wheat producer. Though India consumes most of the wheat it produces, for months it has been seen as a country that could help make up for the shortage of global supply affected by the Russian invasion of Ukraine, which has disrupted wheat production in both major suppliers. 

India’s Ministry of Commerce and Industry announced the export ban late on Friday. The ministry said in a notice that the decision was taken “to manage the overall food security of the country, and to support the needs of the neighboring and other vulnerable countries.”

Exceptions apply to shipments already issued letter of credit or for countries that require wheat “to meet their food security needs and based on the requests of their governments,” the notice said. 

The announcement follows a surge in inflation to 7.79 percent in April, with wheat prices alone rising to record highs in India. New Delhi also had to lower its estimated wheat output this year after earlier targeting a record 111 million tons, due to the effect of a heat wave on production. 

“What has happened is that procurement of wheat by the government has come down and the production of wheat has also come down,” New Delhi-based economist Arun Kumar told Arab News.

“There is a fear in India that inflation is already high, and if the prices of wheat also goes up then the inflation will cause havoc.” 

Kumar added that the sudden decision came “when the international community is looking at us with hope,” and could have an impact on India’s international credibility. 

Agriculture expert Devinder Sharma said that the ban was necessary to ensure adequate stock to meet domestic needs. 

“Traders are lobbying that the government should not step in. I think that would be very detrimental to India’s food security culture because we need to keep adequate stock of wheat in the buffer because we have the largest population of hungry people in India,” Sharma told Arab News. 

Former finance minister and senior leader of the main opposition Congress Party, P. Chidambaram, said the wheat export ban is “an anti-farmer measure.”

“It deprives the farmer of reaping the benefits of higher export prices,” he said. 

Farmers also lamented the government’s decision. 

“It was a good opportunity for farmers to earn higher income with the wheat prices up in the international market,” Ashutosh Kumar, spokesperson of Punjab-based Hail Farmers’ Movement, told Arab News. 

“But the government did not show the urgency to procure wheat fast and keep the stock intact.”

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