- Wheat flour retail prices have fallen by at least 5% over the past 10 days.
- Wheat prices were expected to decline within about a week after
- However, the Russian-Ukrainian war and export bans imposed by various countries are worsening the global food supply chain.
Retail prices for wheat flour or
reportedly declined by at least 5% in the past 10 days, bringing relief to inflation-ridden Indians.
This is a direct effect of the wheat ban that the Indian government put in place on May 14. Global wheat prices rose 6% and hit a record high a week after India’s ban.
“The government’s decision to ban the export of wheat is expected to cool domestic prices in about a week,” Sudhanshu Pandey, food secretary, said after announcing the ban, according to a PTI report.
Pandey assured that the “public distribution system” will run smoothly. The ban was intended to stabilize wheat prices and protect against international price fluctuations.
India is the second largest producer and the ninth largest exporter of wheat in the world. However, due to its large population, most of the crop produced is consumed domestically, leaving little room for exports.
According to government data, India exported 14.6 million tonnes of wheat in April this year.
India ban creates wheat shortage
Atta prices have dropped significantly throughout the value chain – in wholesale and retail markets. An early monsoon also raised hopes for a good harvest this year, prompting speculators to lower prices.
In addition to war, export bans imposed by various countries are worsening the global food supply chain. The world has about 10 weeks of wheat stocks as the Russian invasion of Ukraine entered its fourth month, according to a May 19 United Nations report.
Ukraine is considered the “breadbasket of the world” and Russia and Ukraine together account for almost a third of world wheat exports. Drought and extreme weather also add to the woes caused by war and supply chain disruption.
“Current conditions are worse than those of 2007 and 2008. And the drought in the wheat growing regions of the world is the most extreme in more than 20 years. Similar inventory issues also apply to corn and other grains,” said Sara Menker, CEO of agricultural analytics firm Gro Intelligence.
India also recorded the hottest March ever, a scorching heat wave with the temperature over 45 degrees Celsius. This is yet another reason the government has given for its sudden wheat export ban.
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