India has banned wheat exports this year due to rising grain prices due to the Russia-Ukraine war.
T. Narayan | Bloomberg | Getty Images
India has banned wheat exports this year due to rising grain prices due to the Russia-Ukraine war, becoming the last country to do so.
Russia and Ukraine are among the largest exporters of the commodity, which has seen a sharp rise in wheat prices due to the war. According to the World Bank, both countries account for 29% of global wheat exports.
Wheat prices rose nearly 6% on Monday after India’s weekend announcement.
“Russia’s invasion came at a critical time for the global food market, as food prices were already high due to the disruption of the supply chain and drought-related yields last year,” said Peterson Institute for International Economics (PIIE), a Washington, D.C.-based think tank. Tank, in an April note.
According to PIIE, Russia and Ukraine are among the top five world exporters of barley, sunflower and sunflower oil, as well as many important cereals and oilseeds, such as corn.
India is not alone. In addition to Russia and Ukraine, Egypt, Kazakhstan, Kosovo and Serbia have also banned wheat exports.
Fear of inflation and food security
And it’s not just wheat. Many countries have also imposed sanctions on other food exports as the Ukraine crisis has pushed up global inflation.
Prices of various other food products have risen, contributing to rising global inflation. Some of these products include sunflower oil, palm oil, fertilizers and grains.
In addition to rising food prices, the supply of many food items is also uncertain.
Ukraine has been unable to export grain, fertilizer and vegetable oil, while the conflict has destroyed crop fields and disrupted a normal planting season. The government has also accused Russia of stealing and reselling hundreds of thousands of metric tons of grain. Russia’s foreign ministry did not immediately respond to a request for comment by CNBC.
PIIE analysts Joseph Glaber, David LeBorde and Abdullah Mamun wrote, “If the war continues, food shortages, especially grain and vegetable oil shortages, are likely to escalate, leading to more countries restricting trade.”
According to the Financial Times, over the weekend, a group of 7 industrialized nations issued a warning about the risk of a global hunger crisis unless Russia lifts the blockade on Ukrainian crops currently stuck in Ukrainian ports, according to the Financial Times.
Countries that are banning food exports
According to a live tracker created by PIIE, here is a list of countries that have banned food exports in the months since the start of the Russia-Ukraine war.
Source: Peterson Institute for International Economics
India has said it is banning wheat exports “to manage the country’s overall food security”, according to local media reports.
Other countries that have recently imposed food export bans include Indonesia, which restricts palm oil exports, a key ingredient used in many food as well as non-food products.
Like India, Indonesia has noted the need to ensure food availability internally, as global food inflation has risen to record highs since the war. Indonesia is more than half the world Supply of palm oil.