India bans wheat exports with immediate effect

India has imposed a ban on wheat exports with immediate effect as a scorching heatwave curtailed production in the country and local prices hit an all-time high amid strong export demand.

The Indian ban is likely to drive up global prices to new peaks and hit poor consumers in Asia and Africa as the country is the second largest wheat producer in the world, reports Reuters.

India’s wheat exports reportedly surged to 7 million tonnes in 2021-22 thanks to strong global demand.

Of the total exports, around 50 per cent of shipments were exported to Bangladesh in the last fiscal, Indian news agency PTI reported citing official data.

In December last year, the commerce ministry reportedly said that Bangladesh emerged as the top destination of wheat exports from India in the financial year 2020-21.

As per the ministry data, Bangladesh received 54 per cent of the total wheat exports from India in the year.

According to the Reuters report, global buyers were banking on the world's second-biggest wheat producer for supplies after exports from the Black Sea region plunged following Russia's invasion of Ukraine in late February. Prior to the ban, India was targeting to ship out a record 10 million tonnes this year.

"The ban is shocking," a Mumbai-based dealer with a global trading firm said. "We were expecting curbs on exports after 2-3 months, but seems inflation numbers changed government's mind."

Rising food and energy prices pushed India's annual retail inflation up towards an eight-year high in April, strengthening economists' view that the central bank would have to raise interest rates more aggressively to curb prices.

Wheat prices in India have risen to record high, in some spot markets to as high as 25,000 rupees ($322.71) per tonne, versus government fixed minimum support price of 20,150 rupees.