Ukraine War: Global wheat prices jump after India export ban
Image credit: Deccan Herald
Wheat prices have risen on international markets after India restricted the main cereal’s export.
In Chicago, the benchmark wheat index climbed as high as 5.9%, the highest level in two months.
The export embargo comes after India’s wheat crops were devastated by a heatwave, sending domestic prices to new highs.
Wheat prices have skyrocketed on world commodities markets in recent months, raising the cost of everything from bread and cakes to noodles and pasta.
India’s government stated that exports backed by letters of credit already given and to countries requesting supplies “to meet their food security needs” will be permitted.
Agriculture ministers from the Group of Seven (G7) nations meeting in Germany, however, have criticised the decision.
The G7 is a group of seven of the world’s most powerful “advanced” economies that govern global trade and the international financial system. The countries engaged are Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States.
Despite being the world’s second-largest wheat producer, India has never been a major exporter because the majority of its harvest is sold in domestic markets.
India had planned to ship a record 10 million tonnes of wheat this year before the restriction.
According to the United Nations, global food prices hit a new high in March after the Ukraine war prompting a “giant surge” (UN).
Global food prices fell marginally in April, according to the UN, but are still about 30% higher than this time last year.
Inflation has been rising all over the world due to rising food costs and an increase in the cost of electricity.
As a result, major central banks, such as the Federal Reserve of the United States and the Bank of England, have raised interest rates in an attempt to contain rising prices.
On Sunday, Lloyd Blankfein, the executive chairman of Wall Street investment bank Goldman Sachs, said the US, the world’s largest economy, faces a “very, very high danger” of recession.
Mr Blankfein’s remarks on CBS’s Face the Nation come the same day as Goldman Sachs experts lowered their US economic growth predictions for this year and next year.