WORLD – Indian government is planning to release more wheat to the local market to tame prices that have been on an upward trend since the invasion of Ukraine significantly curtailed the availability of the commodity in world markets.
After the invasion, the Indian government introduced an export ban in May, but that move did little to halt domestic price increases.
Moreover, the government set a fixed price of 21,250 rupees (US$256.77) per tonne, but the domestic wheat prices still reached an all-time high of US$393 per tonne in January, nevertheless.
In January 2023, the government announced a 3-million-tonne allocation to help lower local prices and now plans to provide an additional 2 million tonnes of wheat to bulk consumers such as flour millers.
This persistent increase in prices now prompts the government to continue seeking better measures to bring relief to consumers of wheat in the country.
The recent wheat allocations totaling 5 million tonnes will significantly regulate the domestic prices in the world’s second most populous country and give the planned government interventions a chance to work.
According to a New Delhi-based global trader, wheat prices have reduced by almost 25% since January, which will help the government buy ample quantities from farmers in the new season.
Ukraine seeks extension of black sea grains deal
As India is trying to regulate its local wheat prices, Ukraine still seeks to assert its place as a major grain exporter globally after exports from the country suffered significantly following the Russian invasion.
Ukraine is now in negotiations to have the deal extended for another year as the March 2023 expiry approaches.
This initiative was instrumental in alleviating some of the possible catastrophic effects that would have resulted from the 2022 food crisis, especially in Africa.
Since the black sea grain initiative was signed, Ukraine has exported approximately 3 million tonnes of agricultural products monthly.
Moreover, this number could increase substantially if Russia agrees to allow shipments out of the Port of Mykolaiv, which accounted for 35% of Ukraine’s food exports prior to the invasion.
Today, millions of people, especially in Africa, are at risk of starvation as agricultural production goes further down because of drought; and the extension of the black sea grains initiative could be the only solution for these at-risk populations.