In the wake of wheat prices surging to a new record high in European trading on Monday after India's decision to ban exports of the commodity as a heatwave hit production, the US Representative to United Nations, Ambassador Linda Thomas-Greenfield said that India will be one of the countries participating in a meeting at the UN Security Council. Additionally, she noted that the United States hopes to convince India to reconsider its decision to limit exports of wheat due to possible shortages in future amid excessive heat in the Indian subcontinent.
“India will be one of the countries participating in our meeting at the Security Council, and we hope that they can, as they hear the concerns being raised by other countries, they would reconsider that position," the US Representative to UN said on India wheat export ban.
“We've seen the report of India’s decision. We’re encouraging countries not to restrict exports because we think any restrictions on exports will exacerbate the food shortages," US Representative to United Nations noted.
The impact of India's wheat export ban on European trading:
- India, the world's second-largest wheat producer, said on Saturday that it was banning exports after its hottest March on record, with traders needing express government approval to enter into new deals.
- India said the move was needed to protect the food security of its own 1.4 billion people in the face of lower production and sharply higher global prices.
- Notably, the price jumped to 438.25 euros ($456.68) per tonnes the Euronext market closed, breaking the previous closing record of 422.40 struck on March 7, according to trader Damien Vercambre at grains brokerage Inter-Courtage. It had earlier set a record opening price of 435 euros.
- On the Chicago Board of Trade, wheat was trading nearly six percent higher in midday trading at $12.48 per bushel.
- Global wheat prices have soared 40% on supply fears since Russia's February invasion of agricultural powerhouse Ukraine, which previously accounted for 12 percent of global exports.
- The spike, exacerbated by fertiliser shortages and poor harvests, has fuelled inflation globally and raised fears of famine and social unrest in poorer countries.
- Some parts of India have seen prices in wheat and flour jump 20 to 40% in recent weeks, Commerce Secretary BVR Subrahmanyam said on Sunday.
- Because of the sharp rise in global prices, some farmers were selling to traders and not to the government.
- This got the government worried about its buffer stock of almost 20 million tonnes -- depleted by the pandemic -- needed for handouts to millions of poor families and to avert any possible famine.
- The export ban drew sharp criticism from the Group of Seven industrialised nations, which said that such measures "would worsen the crisis" of rising commodity prices.
- This developments comes following India's recent decision to send delegations to Egypt, Turkey and elsewhere to discuss boosting wheat exports.
- India recorded its warmest March on record -- blamed on climate change -- and in recent weeks has seen a scorching heatwave with temperatures upwards of 45 degrees Celsius (113 Fahrenheit). This hit farmers in wheat-producing northern India, prompting the government to predict output would fall at least five percent this year from 109 million tonnes in 2021.
- The downturn comes at a time when Ukraine, which was in line to become the world's number three wheat exporter, will see its output cut by a third due to the fighting there, according to forecasts by the US Department of Agriculture.
(With inputs from agencies)
Subscribe to Mint Newsletters
Premium