India Bans Wheat Exports With Immediate Effect Due To Food Security Concerns — Know About Its Factors & Impact

India has banned wheat exports as part of measures to control rising domestic prices

The average price of wheat flour in retail markets stood at Rs 32.91 per kilogram on May 9, a nearly 13 per cent increase compared to last year.

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New Delhi: In a big move that will impact India’s export, the government has banned wheat exports with immediate effect over concerns of rising domestic prices.  "There is a sudden spike in the global prices of wheat arising out of many factors, as a result of which the food security of India, neighbouring and vulnerable countries is at risk," the Directorate General of Foreign Trade (DGFT) said in a notification dated May 13.

What triggered the ban on wheat export?

The government stated that the ban has been imposed to manage the overall food security of the country and support the needs of the neighbouring countries.

“To manage the overall food security of the country and to support the needs of the neighbouring and other vulnerable countries, the central government bans wheat exports with immediate effect,” reported news agency ANI.

To manage the overall food security of the country and to support the needs of the neighbouring and other vulnerable countries, the Central Government bans wheat exports with immediate effect. (1/2) pic.twitter.com/dB4tAViLNk

— ANI (@ANI) May 14, 2022

However, the Centre noted that the export will be allowed in case of shipments where an irrevocable letter of credit is issued on or before the date of notification. The decision is part of measures to control rising domestic prices, said the notification.

The average retail price of wheat flour has surged 13 per cent in a year. The average price of wheat flour in retail markets stood at Rs 32.91 per kilogram on May 9, a nearly 13 per cent increase compared to last year, news agency PTI reported citing official data.

India's wheat production stood at 109.59 million tonnes in the 2020-21 crop year (July-June).

How will the decision impact India?

India's ban on wheat export comes amid the Russian-Ukraine conflict, which began in February and affected the supply from the Black Sea to other nations. The United Nations has also repeatedly raised concerns over an imminent food shortage.

The decision to ban wheat exports points out India’s concerns about high inflation adding to a spate of food protectionism since the war started, reported Bloomberg.

Globally, countries are trying to ensure local food supplies with agriculture prices surging. Indonesia has halted palm oil exports, while Serbia and Kazakhstan imposed quotas on grain shipments.

The decision to curb exports would hit India’s ambition to cash in on the rally in global wheat prices after the war impacted trade flows originating from the critical Black Sea breadbasket region. 

Importing nations had turned to India for supplies as the top buyer Egypt had recently approved the South Asian nation as an origin for wheat imports.

The record heat wave has damaged wheat yields across the country prompting the government to consider export restrictions, reported Bloomberg. However, the food ministry back then said it didn’t see a need to control exports even as the government cut estimates for India’s wheat production.

In a separate notification, the DGFT announced the easing of export conditions for onion seeds. "The export policy of onion seeds has been put under the restricted category, with immediate fact," it said, according to news agency PTI report. The export of onion seeds was earlier prohibited.