NEWS ANALYSIS: India’s wheat export ban irks US, G7 nations

Photo-dw.com

MELBOURNE, 15 May 2022: India’s wheat export ban citing its own food security concerns has been criticised by the United States and G7. The German Agriculture Minister Cem Ozdemir wants India to follow its responsibility as a G20 member. The Indian ban on 13 May from the Ministry of Commerce & Industry immediately bans wheat exports with few exceptions. The Indian ban is likely to push up global wheat prices already rattled by the disruption caused by the Russia-Ukraine crisis.

“Global wheat production is forecast down with smaller crops in Ukraine, Australia, Morocco, Argentina, the European Union, and China. Overall consumption is down with lower feed and residual
use only partially offset by higher Food, Seed, and Industrial (FSI) use. Feed use is expected lower, especially in Australia, China, and the European Union due to smaller domestic crops. Food
consumption continues to rise due to population growth. Global ending stocks are forecast down, with smaller carryout in China, India, and most major exporters. Trade is forecast at a record with
stronger imports across Africa, Southeast Asia, and the Western Hemisphere, ” says the Grain: World Markets and Trade, United States Department of Agriculture Foreign Agricultural Service, May 2022. (FULL REPORT ACCESS AT THE END OF THE STORY)

Germany’s Agriculture Minister Cem Özdemir.Photo-bmen.de

The German Minister in comments at a presser after G7 Agriculture ministers said, “If everyone starts to impose export restrictions or to close markets, that would worsen crisis”

In a 14 May media release ‘Pathways towards Sustainable Food Systems in Times of Crises’, the German Agriculture Minister says, ” “We are also committed to stabilising the markets. Agricultural products must not be stored for an undue amount of time in individual countries – this shows a lack of solidarity and leads to further price hikes. We speak out against export bans and call for markets to be kept open. With concern, we also discussed that some countries have imposed an export ban on wheat or palm oil. We urge all countries to meet their responsibilities.”

Speaking to Agri-Pulse from a G7 summit in Germany this weekend, U.S. Agriculture Secretary Tom Vilsack said the U.S. and its G7 partners understand the India ban is “exactly the wrong thing to do at this point because it really does create additional disruption of the market and can potentially increase prices, which make food inflation and availability significantly worse than they already are. I sincerely hope that India reconsiders that ill-advised decision.”

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Meanwhile, India has defended its wheat export ban decision. Addressing a press conference with Sudhanshu Pandey, Secretary Department of Food and Consumer Affairs, and Manoj Ahuja, Secretary of Agriculture, India’s Commerce Secretary said that all exports orders where the letter of credit has been issued would be fulfilled. He added that directing the wheat exports through government channels would not only ensure fulfilling the genuine needs of our neighbours and food-deficit countries but also control inflationary expectations.

Talking about the availability of wheat, Subrahmanyam said, “Apart from the food security of India, the Government is committed to ensuring food security of neighbours and vulnerable countries,” he said.

He said that the control order serves three main purposes: “It maintains the food security for the country, it helps others who are in distress, and maintains India’s reliability as a supplier,” he said.

He said that the government’s order on exports was giving a clear direction to the wheat market. “We do not want the wheat to go in an unregulated manner in places where it might just get either hoarded or it may not serve the purpose of serving the food requirements of vulnerable nations. That’s why government to government window has been kept open,” he said.

Congress Party spokesman Prof. Gaurav Vallabh said, reports NDTV, “This is another example of policy paralysis, policy inconsistency, and anti-farmer policy of BJP.”

The gap in world wheat exports left by the Russia-Ukraine war was being filled by India and the Indian PM had said last month the country will supply food stock to the world. The ban u-turn has thrown the world wheat market into turmoil.

GRAIN: WORLD MARKETS AND TRADE ( United States Department of Agriculture Foreign Agricultural Service, May 2022)

By Neeraj Nanda

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