Wheat prices hit record high in EU markets

Paris: Wheat prices surged to a record high on Monday internationally after India decided to ban exports of the commodity as a heatwave hit production.

The price, which was already high in the wake of Russia's invasion of major wheat exporter Ukraine, jumped to 435 euros ($453) per tonne as the European market opened.

The Indian government will suspend overseas sales to manage its food security, according to a notification dated May 13. This drew criticism from the Agriculture Ministers of the Group of Seven nations, who said that such measures make the world's crisis worse.

However, China came to India's defence after G7's criticism, saying that blaming developing countries like India won't solve the global food crisis. Global Times (GT), a Chinese government outlet said, "Blaming India won't solve the food problem." "Now, the Agriculture Ministers from G7 urge India not to ban wheat exports, then why won't G7 nations themselves move to stabilize food market supply by hiking their exports?" asked an editorial published in GT.

"Although India is the second-largest wheat producer in the world, it accounts for only a small part of global wheat exports.

By contrast, some developed economies, including the US, Canada, the EU and Australia, are among major exporters of wheat," it added.

According to the GT, if some Western countries decide to reduce wheat exports in the wake of a potential global food crisis, they will be in no position to criticize India, a country that faces pressure to secure its own food supply.

The article argued that G7 countries were welcome to join the efforts in tackling the global food crisis and advised against criticizing India and other developing countries.

Prices have surged around 60% in 2022

Benchmark futures in Chicago rose as much as 5.9% to $12.475 a bushel, the highest in two months and within about $1 of the all-time high set just after Russia's invasion.

Prices have surged around 60% this year, increasing the cost of everything from bread to cakes and noodles. In Paris, milling-wheat rose 5.1% to 431.75 euros ($450) per ton, a record for most-active futures.

The surprising thing is that India isn't even a prominent exporter on the world stage. The fact that it could have such a major impact underscores the bleak prospect for global wheat supplies. War has crippled Ukraine's exports, and now droughts, floods and heat waves threaten crops in most major producers.

"If this ban occurred in a normal year the impact would be minimal, but the loss of Ukraine volumes exacerbates the issues," said Andrew Whitelaw, a grains analyst at Melbourne-based Thomas Elder Markets.

India's decision to halt wheat exports came after a record-breaking heat wave parched the crop during a crucial period, spurring estimates of slumping yields. The output risk created a dilemma for India, which has tried to fill the gap as the shortfall in Ukraine's exports push buyers toward alternative origins.