Wheat prices scaled to a 14-year high on Tuesday with India banning exports of the commodity after shipments from Ukraine stopped since Russia invaded the country late in February.
But India is not the only country to slap a ban on wheat exports. Countries such as Egypt, Kazakhstan, Kosovo and Serbia have also stopped sending out the commodity.
Wheat prices began soaring as Russia and Ukraine together account for 29 percent of global wheat exports, reported CNBC.
Battling domestic inflation and crop-destructive heat wave, India had to change course and ban wheat exports less than a month after the country said that it would sell grains to regions in short supply, CNBC reported.
As per PIIE, Russia and Ukraine come under the top five global exporters for several other important cereals and oilseeds as well, such as barley, sunflowers and sunflower oil, and maize.
Bans on food exports are likely to inflate commodity prices, and as a result, food costs too. Many countries have disallowed the export of other food items as well, as global inflation rises. Some of these items include sunflower oil, palm oil, fertilizers and grains.
“As the war continues, there is a growing likelihood that food shortages, particularly of grains and vegetable oils, will become acute, leading more countries to turn to restrictions on trade,” wrote PIIE analysts Joseph Glauber, David Laborde and Abdullah Mamun.
Not only is the war destroying crop fields, but the Ukranian government is also blaming the Russians for stealing several hundred thousand metric tons of grain and reselling them in the market.
Other countries such as Indonesia have restricted the export of palm oil which is an essential ingredient in many food as well as non-food items, and the country accounts for more than half of the world’s palm oil supply. Like India, Indonesia banned palm oil to ensure food security for its citizens.
Talking about new export measures, Valdis Dombrovskis, the EU’s trade chief, told CNBC on Sunday, “That’s something which is very much of concern.”
“We agreed with the United States to cooperate and coordinate our approaches in this area, because... as a response to Russia’s aggression against Ukraine and a corresponding increase in food prices and concerns about food security, countries are starting to take export restrictive measures. And we think that this is a tendency which can only actually aggravate the problem,” Dombrovskis said.
He added that these measures, such as Indonesia’s ban on palm oil exports, “make matters worse.”
The members of the Group of 7 countries have also issued a warning about the imminent threat to global food supply, after India’s wheat ban, unless Russia allows Ukrainian grain to flow which is currently stuck at the country’s ports.
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