G7 criticizes India's decision to suspend wheat exports

A combine harvester harvesting wheat near Ahmedabad in India, March 16, 2022. © AMIT DAVE/REUTERS

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India, the world's second largest wheat producer, has decided to suspend its exports.

The reason given is to maintain sufficient reserves after a 2022 harvest damaged by an exceptional heat wave.

A decision criticized by G7 countries, as it could aggravate tensions in the world wheat market

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After the start of the war, Indian wheat was supposed to make up for the lack of Ukrainian and Russian wheat.

Prime Minister Narendra Modi even declared that India would feed the world.

This decision to suspend exports is not surprising, however, because in normal times India exports very little of its wheat and the high temperatures, particularly in the Uttar Pradesh region, have caused production forecasts for the next harvest to fall.

Export contracts concluded before the decree may be honoured, the measure only concerns future exports.

For the latter, India will approve requests from other countries on a case-by-case basis " 

to meet their needs 

".

Gathered in Stuttgart, Germany, the G7 Agriculture Ministers immediately criticized this decision, which comes as the world wheat market is already under great tension due to the Ukrainian conflict.

"

If everyone starts imposing such export restrictions or even shutting down markets, it will only worsen the crisis and it will also hurt India and its farmers

 ," said the German Minister of Agriculture.

Agriculture, Cem Özdemir, following a meeting with his counterparts.

A complicated equation

We will have to find solutions while Ukrainian wheat is still paralyzed by the Russian blockade on its ports.

European and American production will also suffer from droughts - these countries will not export more than usual.

Only Russia will want to maintain its exports, but its logistical capacities risk being limited between international sanctions and cautious maritime operators.

The world market, which consumes approximately 200 million tonnes of wheat per year, must find new volumes.

And this announcement from India adds a new layer of complexity.

The concern for the coming weeks is that precisely the other major wheat exporting and producing countries, whether the United States or Europe, are themselves faced with climate issues.

Sébastien Abis (Iris) discusses the tense situation on the wheat market

Alexis Bedu

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