22.05.2022
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India bans wheat exports to ensure country’s food security By IFX

The Indian government issued a decree late on Friday to ban the export of wheat and to help neighboring and needy states, reports the Times of India, citing the text of the document. As noted, the export of wheat will be allowed only in relation to “supplies for which an irrevocable letter of credit has been issued.” “Exports will also be allowed based on the permission granted by the government of India to other countries to meet their food security needs and based on the request of their governments,” the document says.

According to Indian media, the ban was introduced due to the fact that concerns about wheat production turned out to be lower than even the revised estimates of 105 million tons. India lost part of the crop due to the intense heat in March. The government is also forced to respond to inflation, which rose to 7.79% in April. Concerns about a possible shortage of wheat also arose against the backdrop of events around Ukraine. As reported, the sowing season in Ukraine lags behind last year by 20-30%. In addition, the country faces logistical problems.

According to the forecast of the US Department of Agriculture, in the 2021/2022 agricultural year (ends in June 2022), India will harvest 109.59 million tons of grain, exports will amount to 8.15 million tons (according to the April report). The forecast for the new 2022/2023 agricultural year, released in May, turned out to be lower – 108.5 million tons, the export estimate is slightly higher – 8.5 million tons.

According to the Russian Union of Grain Exporters, the decision to ban exports is a reversal just two days after the Indian government announced its plans to increase exports to a record 10 million tons. “As is often the case, India’s decision to ban exports is both predictable and unexpected,” Eduard Zernin, chairman of the board of the Union, told Interfax. — We have already said that their statements about ambitious export goals are similar to political declarations and do not reflect the real situation. The anomalous heat left no chance. Now this fact has become official. “We remain confident that Russian grain has no reasonable alternatives in the Middle East and North Africa region. The sooner international organizations recognize this fact and begin to take practical steps to resolve the logistical and financial problems artificially raised in the way of Russian grain, the sooner the urgent problems of the countries that need our grain will be resolved,” he stressed.

According to some reports, India has signed export contracts for at least 5 million tons, while many global traders have consolidated a significant amount of wheat domestically through direct purchases from farmers.

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