India Restricting Sugar, Wheat Exports Amid World Food Crisis

Also banning wheat exports.

QUICK FACTS:
  • As world food supplies shrink and prices rise, India has decided to restrict the sale of sugar to international markets and has banned the export of wheat altogether, CNN Business reports.
  • The nation is the second-largest exporter of sugar, right after Brazil, and the government said that it has to take this action to maintain the country’s sugar stockpile.
  • The Indian government said in a statement Wednesday that the country will limit sugar exports to 10 million tons for the marketing season that runs through September. 
INDIA’S ECONOMIC CLIMATE CONDITIONS LENDING TO THE CAP:
  • India, which is Asia’s third-largest economy, saw an annual retail inflation rate of 7.8% in April, making it the highest level in eight years.
  • The decision to limit the export is also being called another sign of “food protectionism,” as concern is on the rise that the war between Russia and Ukraine could cause a depletion of resources, such as wheat.
  • Estimates about the total amount of wheat exported throughout the world to other nations from Russia and Ukraine range from 30-50%
BACKGROUND:
  • During the last year, including one major export season, India shipped about 7 million tons of sweetener overseas, making it the largest amount sold in years, according to the Indian government. In the current export year, from Oct 2021 to Sept 2022, the Indian sugar mills signed contracts committing to export around 9 million tons.
  • Indonesia, the world’s biggest palm oil exporter, is also removing a subsidy on bulk cooking oil and replace it with a price cap on the raw materials for local refiners.
  • The U.S. Department of Agriculture said that there were only a little less than four days suitable for farm fieldwork in Minnesota last week due to unusually cold and wet weather. That kind of bad weather has meant that only 11% of Minnesota’s spring wheat crop was in the ground as of Sunday, compared to 100% at the same time last year, according to The Washington Post.

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