NEW DELHI, India: India has banned the exporting of wheat, despite stating it was targeting record international shipments this year, amidst a major heatwave reducing the nation's harvests and domestic prices reaching record highs.
However, Delhi said it would still allow exports backed by already issued letters of credit, as well as countries that request supplies "to meet their food security needs."
During a press conference, senior government officials also said the ban on overseas wheat shipments could be revised.
Due to Russia's invasion of Ukraine, which caused a shortage in global wheat supplies, global buyers were banking on supplies from India, the world's second-leading wheat producer, which had aimed to ship a record 10 million tons this year.
There was no dramatic fall in wheat output in India this year, but unregulated exports have led to a rise in local prices, officials added.
In New Delhi, Commerce Secretary BVR Subrahmanyam told reporters, "We do not want wheat trade to happen in an unregulated manner, or hoarding to happen."
While not one of the world's top wheat exporters, India's ban could further drive up global prices amidst already limited supplies, which would especially affect poor consumers in Asia and Africa.
Wheat prices in India have risen to record highs, in some spot markets hitting $320 per tonne, well above the government's minimum support price of 20,150 rupees, boosted by rising fuel, labour, transportation and packaging costs.
"The rise in wheat prices was rather moderate, and Indian prices are still substantially lower than global prices. Wheat prices in some parts of the country had jumped to the current level even last year, so the move to ban exports is nothing but a knee-jerk reaction," said Rajesh Paharia Jain, a New Delhi-based trader, as reported by Reuters.
In April, India exported a record 1.4 million tonnes of wheat and agreements were already signed to export some 1.5 million tons in May.
"The Indian ban will lift global wheat prices. Right now there is no big supplier in the market," another dealer told Reuters.