Wednesday, June 29

G-7 fears India’s ban on wheat exports will lead to global supply crisis

Correspondent in Berlin



The G-7 agriculture ministers, meeting since yesterday in Germany, have criticized the decision of India, the world’s second largest producer, to ban wheat exports. According to the meeting’s host, German Minister Cem Özdemir, the G-7 countries are in favor of open markets and are ready to monitor food production and prices more closely in the future, but are against the food crisis lead to nationalizations of basic food products. Özdemir, a member of the Greens party, has criticized the Indian ban, recalling that “we all have a responsibility to the rest of the world, especially the big exporting nations.” In Stuttgart and after finishing the meeting with his counterparts, he acknowledged that in the G-7 the Indian measure has been perceived “with a very critical view”.

The agriculture ministers consider that the situation is critical enough for the heads of state and government of the G-7 to discuss the issue, as reported by Özdemir. India will be invited to the scheduled summit at Schloss Elmau in Bavaria at the end of June. In the meantime, “we ask that the markets remain open,” Özdemir insisted. The G-7 proposes henceforth monitor production prices and food more closely than before, including fertilizers as well. To this end, it will strengthen the agricultural information system of the G-20 group of industrialized and emerging countries.

international fear

With an immediate ban on wheat exports, India further fuels fears of an impending famine in the world caused by the war in Ukraine. The Indian government announced this decision on Saturday with the aim of curbing price increases in its own country.

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India was planning to sell a record amount of around ten million tons of wheat on the world market this year, but an unusually early heat wave with temperatures well above 40 degrees in the country has raised concerns about a failed harvest and the export ban is now likely to push up prices on the world market as this reduced supply adds to the tonnes of wheat missing also due to the war in Ukraine and the consequent lack of deliveries from the Black Sea region.

The ban would particularly affect to the poorest countries in Asia and Africa. India has guaranteed that existing supply contracts will be honored and that countries that would otherwise have to fear “food security” will also be supplied. However, the export of additional quantities will be stopped. According to the United Nations, almost 25 million tons of grain that have already been harvested in Ukraine cannot be taken out of the country due to the war. Also, the next harvest will not be able to stay at the previous level. That is driving up prices around the world. Ukraine supplies half of the grain for the World Food Program.

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