Food protectionism is spreading, with Indonesia suspending palm oil exports and India controlling wheat exports as international food prices soared due to the Ukraine crisis.
Concerns and apprehensions that the international market will be engulfed in considerable shock are also increasing as major producer countries put forward the principle of 'Priority of national interest' and 'Priority of supply in the domestic market'.
The fact that India, the world's second largest wheat producer, banned wheat exports as of the night before today (14th) and decided to export only the amount approved by the central government, is expected to be a huge negative for the international market, which has shown signs of unrest. .
This is because Ukraine, which is called the 'Bread Basket of Europe', has suffered a sharp decline in wheat yields after being invaded by Russia, and major producers banned exports in a state where export itself became difficult due to Russia's blockade of the Black Sea coast.
As supply in the international markets of Ukraine and Russia, which account for more than 25% of the world's wheat exports, decreased, wheat flour prices soared, and even bread and ramen prices rose one after another.
India exported 1.4 million tons of wheat last month, more than five times the export volume compared to the same period last year, and the international market was sighing as it predicted that production would not decrease significantly this year despite concerns about poor crops due to the heat wave.
However, it is evaluated that the Indian government changed its original position that 'there will be no restrictions on wheat exports' and gave a greater shock to the international market, which had been relieved by a ban on exports from that day.
The Indian government cited 'ensure food security' as the reason for the export ban.
This is because, if the government does not control it, wheat producers and distributors will focus on exports in pursuit of high international market prices, resulting in higher flour prices in the domestic market and even shortages.
This phenomenon has already been seen in Indonesia.
Indonesia, the world's No. 1 coal exporter, has limited the price of coal supplied to power plants by the government to US$70 per ton. faced
In response, President Joko Widodo issued a prescription to ban coal exports entirely for the month of January, saying, "Mining, plantation, and natural resource companies must supply the domestic market first before exporting."
In addition, despite being the world's No. 1 producer of palm oil, the export of edible milk was halted on the 28th of last month until the price of edible milk fell to the level of the beginning of last year as manufacturers concentrated on exports.
The Indonesian government's decision was flooded with external criticism that it fueled the rise in world food prices and disturbed international market prices, but the government did not give up.
President Jokowi said, "It is ironic that there is a shortage of cooking oil in the world's largest palm oil producer."
However, this phenomenon is not limited to Indonesia and India.
Several other countries are also intensifying their 'food protectionism' by suspending food exports or expanding stockpiles on the principle of prioritizing supply to the domestic market.
Egypt has suspended exports of wheat, wheat and soybeans for three months, while Turkey, Argentina and Serbia have already banned or are considering controls.
Argentina raised the export tax on soybean oil and soy flour by 2 percentage points to 33% by the end of the year, raising export barriers.
Some countries point out that international market prices are rising excessively reflecting 'fear' as countries with resources such as grains and raw materials are competitively locked in such a move.