India has banned wheat exports with immediate effect, citing a threat to food security, in part due to the conflict in Ukraine and as a scorching heatwave curtailed output and domestic prices reached a record high. 

Despite not being one of the world’s top wheat exporters, India’s ban could push global prices to new highs, putting poor consumers in Asia and Africa at risk. 

A spike in global wheat prices threatened India’s food security and that of neighbouring and vulnerable countries, according to a notice published in the government gazette on Friday by India’s Directorate of Foreign Trade.

Although India’s wheat output did not fall dramatically this year, government officials said that unregulated exports caused a rise in local wheat prices. 

On Saturday, agriculture ministers from the G7 industrialised nations immediately condemned India’s decision. 

“If everyone starts imposing export restrictions or closing markets, the crisis will worsen,” German Agriculture Minister Cem Ozdemir told a news conference in Stuttgart. 

On Saturday, government officials in New Delhi stated that India would continue to allow exports backed by previously issued letters of credit and to countries that request supplies “to meet their food security needs.”

Officials stated at a press conference that the ban would not be permanent and could be revised.

Wheat prices in India have reached all-time highs, with some spot markets reaching 25,000 rupees ($320) per tonne, far exceeding the government’s minimum support price of 20,150 rupees ($260). 

“It wasn’t only wheat.” The government had to ban wheat exports due to the rise in overall prices,” said another senior government official who declined to be identified because discussions about export curbs were private.

“The ban is shocking,” said a global trading firm’s Mumbai-based dealer.

In April, rising food and energy prices pushed India’s annual retail inflation close to an eight-year high. 

The wheat harvest in India has also been hampered by a heatwave that has set new records. Apart from bad weather, the distribution of free grain to 800 million people during the COVID-19 pandemic has strained India’s vast stocks of wheat – a buffer against famine.

The decision by India comes at a time when global agricultural markets are under severe stress as a result of Russia’s invasion of Ukraine. 

Ukraine, a traditional global breadbasket, has seen shipments disrupted, with the Ukrainian agriculture minister travelling to Stuttgart to discuss getting its produce out with G7 colleagues.

Prior to the Russian invasion, Ukraine exported 4.5 million tonnes of agricultural produce per month through its ports, accounting for 13% of global wheat, 15% of global corn, and half of global sunflower oil. 

However, with Russian warships cutting off the ports of Odesa, Chornomorsk, and others from the rest of the world, the supply can only travel on congested land routes that are far less efficient. 

According to German Minister Ozdemir, “20 million tonnes” of wheat are currently sitting in Ukrainian silos and need to be exported “immediately,” and the G7 “spoke out against export stops and also called for markets to be kept open.”

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