However, an inadvertent effect of these back-to-back moves in May is growing panic – and prices – for other grains. Specifically, rice.
The Russia-Ukraine crisis has taken out a big chunk of wheat suppliers from the world market, leaving countries that rely on them heavily, like Lebanon, in a bind. The likes of Egypt and Turkey had turned to India, the world’s second-largest wheat producer, to plug the gaps. With the Indian government now banning exports, these countries are looking for substitutes.
For instance, there has been a surge in demand for basmati rice in West Asia, where prices are rising by $20-$30 per tonne. “We are suddenly witnessing a huge demand from West Asia,” Gautam Miglani, owner of Haryana-based basmati rice exporter LRNK, told Economic Times. “The buyers are offering exporters a premium for urgent shipping of the grain. Rumours are going around that the government might put an export ban on basmati rice after it had banned wheat exports. This is fuelling the exports.”
Amid the Russia-Ukraine crisis and rising food inflation, several countries, including the US, are urging the Indian authorities to reverse the decisions – especially for wheat.
India has said it has no plans to lift the ban yet, but it is providing the grain to countries that request it for food security needs. (So far, the sugar curb is likely to have less of an impact on global supplies and prices, since Indian sugar exports have been below the new cap until now.)
And it is not just India the world is worried about. Historically, when countries institute export bans, other countries tend to follow suit. The fear is that India will set off a vicious cycle of export restrictions and price increases, worsening global hunger.
This article first appeared on Quartz.