India joins list of countries banning wheat exports
Wheat prices soared around 6% on Monday after India announced a wheat export ban.
Valdis Dombrovskis, EU trade chief, said CNBC that the United States and the European Union seek to improve food supply chains with export restrictions from India and other countries. G-7 foreign ministers have warned that the war in Ukraine is increasing the risk of a global hunger crisis.
“It’s something that is very concerning,” Dombrovskis said. “We have agreed with the United States to cooperate and coordinate our approaches in this area because … in response to Russia’s aggression against Ukraine and a corresponding increase in food prices and concerns about the food security, countries are beginning to take restrictive export measures. And we think it’s a trend that can only make the problem worse.
Export limitations are likely to push up commodity prices and, therefore, food prices.
India joins many countries to ban these exports, in particular Russia and Ukraine, Egypt, Kazakhstan, Kosovo and Serbia.
The International Food Policy Research Institute wrote in April: “With food prices already high due to covid– drought-related supply chain disruptions and drought-reduced yields last year, Russia’s invasion came at a bad time for global food markets.
Also in April, the Peterson Institute for International Economics wrote in a note that the war in Ukraine has “wreaked havoc in the region”, before adding: “It has also contributed to a global food crisis, as Russia blocks exports of vital fertilizers that farmers need elsewhere , and Ukraine’s role as a breadbasket for Africa and the Middle East has been destroyed.
The Indian government has said it will still allow exports for letters of credit already issued and at the request of countries trying to “meet their food security needs”.
Russia and Ukraine are among the world’s largest wheat exporters, accounting for 29% of exports, reports the World Bank.
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