Following India’s ban on the export of wheat, wheat prices have soared to new highs. The international prices have ascended by almost 6 percent and making global markets feel the heat.
India contributes almost 5 percent of wheat to the world export and its sudden ban has imparted pressure on the international markets. In Chicago, the wheat prices rose by 5.9 percent to $12.47, the highest in two months.
This year the wheat price has swollen by more than 60 percent this year and the reason behind it is attributed to Russia’s invasion of Ukraine. These two European countries contribute almost a third of the world’s wheat exports. But the war between the two countries disrupted the exports, and it was India that stepped forward and filled the gap. But due to an unexpected rise in temperature and uncontrollable domestic inflation, India decided to halt its wheat export, therefore making the situation dire in the international wheat market.
“To manage the overall food security of the country and to support the needs of the neighboring and other vulnerable countries. It just exacerbates the food shortage risk, particularly for developing nations and those historically dependent on foodstuffs out of that region,” said Robert Rennie, global head of market strategy at Australian bank Westpac.
Tobin Gorey, director of agricultural strategy at Commonwealth Bank of Australia, termed the wheat ban as the ‘shape shifter’.
“The trade will likely need to replace at least some Indian wheat in the pipeline,” Gorey said. “We suspect that will create an initial flurry of trading but the market will take some time to assess the details.” He said.
However, locally, prices of wheat are showing a sharp dip of 4-8 percent in different states. In Rajasthan, it costs Rs 200-250 a quintal in Rajasthan, Rs 100-150 a quintal in Punjab, and about Rs 100 a quintal in Uttar Pradesh.
