The alarm it caused by an export ban only underscores the fragility and vulnerability of global food supplies.
How did we get here?
According to the US Department of Agriculture, Ukraine is one of the top five global exporters of a range of key agricultural products including wheat, corn, and barley. It is also the top exporter of sunflower oil as well as meal.
However, the food situation was already strained long before the fighting in Europe. Snarled supply chains and unpredictable weather patterns — often the result of climate change — had already pushed food prices to their highest level in about a decade. After the pandemic, affordability was another issue.
Many countries that were most vulnerable had been relying on India’s supplies after Modi’s promise.
“Indian wheat exports have been a success” “Especially important this year in the wake of Russia-Ukraine Crisis,” Oscar Tjakra senior grains and oilseeds analysts at Rabobank told CNN Business.
He stated that the “ban will decrease the availability of global grain for exports by 2022 and will support global wheat prices.”
Ambassador Linda Thomas-Greenfield from the United States stated Monday that she hoped that Indian authorities would reconsider their position.
Rising food protectionism
The government stated that restrictions are not applicable “in cases where prior promises have been made by traders private” and to countries that request supplies to meet their food security requirements.
Tjakra says that these exceptions should not be considered “good news”, but it is harder to determine the impact of the prohibition on global trade.
He said that the “severity” of the ban would depend on the volumes of India’s wheat exports, which are still permitted at the government level, and the volumes of wheat production from other global producers.
India’s analysts believe that allowing unrestricted trade was a bad idea.
Devinder Sharma, an India-based expert in agriculture policy, stated that “We don’t know what will happen” to the climate in India.
According to the UN’s Climate Change Authority, the Intergovernmental Panel on Climate Change(IPCC), India is among those countries most likely to be affected by the effects of climate crisis.
Sharma said that India could be left “standing with just a begging bowl” if crops are destroyed by unpredictable weather.
India isn’t the only country looking inward And putting restrictions on agricultural exports.
Sonal Varma, Nomura analyst, said that with inflation in Asia already on the rise, there are risks to more food protectionionism. However, these measures could end in exacerbating global food price pressures,” he wrote in a note on Saturday.
She stated that the impact of India’s ban on wheat exports will be felt “disproportionately” by low-income countries.
Nomura stated that Bangladesh is India’s top export destination for wheat. Sri Lanka, Indonesia, Yemen and the Philippines are close behind.