Record increase in wheat prices after India bans export

PARIS: Wheat prices surged to a new record high in European trading on Monday after India decided to ban exports of the commodity.

India, the world’s second-largest wheat producer, said on Saturday that it was banning exports after its hottest March on record, with traders needing express government approval to enter into new deals.

After the Indian decision, the price jumped to 435 euros ($453) per tonne as the Euronext market opened, up from the previous record of 422 euros reached on Friday.

Global wheat prices have soared on supply fears since Russia’s February invasion of agricultural powerhouse Ukraine, which previously accounted for 12 percent of global exports.

The spike, exacerbated by fertilizer shortages and poor harvests, has fuelled inflation globally and raised fears of famine and social unrest in poorer countries.

New Delhi said the move was needed to protect the food security of its own 1.4 billion people in the face of lower production and sharply higher global prices.

Some parts of India have seen prices of wheat and flour jump 20 to 40 percent in recent weeks, Commerce Secretary BVR Subrahmanyam said on Sunday.

Because of the sharp rise in global prices, some farmers were selling to traders and not to the government.

Export deals agreed before the directive issued on May 13 could still be honored but future shipments needed government approval, India said.