Despite his promises to “feed the world”, the Indian Prime Minister prohibited the export of wheat on Saturday May 14, in an attempt to contain prices and ensure the food security of the subcontinent.
by
This is a brutal flip-flop. Narendra Modi decided to ban the export of wheat on Saturday May 14, with immediate effect. Ten days earlier, the Indian Prime Minister, on tour in Europe, had assured his Western counterparts that India was going to “feed the world”. “Whenever humanity is faced with a crisis, India finds a solution,” said Modi before the Indian diaspora in Copenhagen. The Indian government had announced in the process that it sent commercial delegations to a certain number of countries, in Morocco, Tunisia, Indonesia, Turkey, to explore the export possibilities of wheat.
The consequences of the Decision of the Indian Prime Minister were immediate: prices have soared on the European market on Monday, May 16. The price of wheat reached 438.25 euros per tonne at the fence, a record. The world market had already been considerably disrupted by the invasion of Ukraine by the Russians, the two countries representing nearly a third of world exports. Wheat prices have increased by more than 40 % since the start of the year.
The government of Narendra Modi has had a hard time adjusting its communication to justify this turnaround which caused the ire of G7 members. Officially, India justifies its change of policy by its desire to control consumer prices inflation on its own territory which reached in April 7.79 %, its highest level for eight years, due to the rise food and fuel prices. According to the Indian Secretary of Commerce, Bvr Subrahmanyam, responsible for explaining the government’s foot change to the media, regions have seen the price of wheat and flour increase by 20 % to 40 % in recent weeks.
Speculative operations
The government hopes to slow down the speculative operations of wheat traders. This decision comes, in fact, in a context of falling national stocks of the cereal constituted by the government each year to ensure food security and its public distribution system. Each month, 700 million poor people receive free or subsidized essential products. But this year, farmers preferred to sell to private traders who offer more attractive prices than the minimum price guaranteed by the government. The prices of wheat in India have reached 25,000 rupees on certain markets (308 euros) per ton, well above the minimum support price at 20,150 rupees.
You have 54.56% of this article to read. The continuation is reserved for subscribers.