Recently, the Indian side announced a temporary suspension of wheat exports, and the ban was immediately implemented, which immediately caused a world uproar. To know that last month India exported 1.4 million tons of wheat, alleviating the pressure on international wheat supply, and now the sudden ban is not understood by many people.
01. Why does India restrict wheat exports?
As we all know, since last year, international grain prices have risen one by one, of which wheat has risen to a new high in nearly 10 years, and Chicago wheat futures have also risen to 1300 cents / pu, more than doubled compared with last year.
Affected by the situation in Russia and Ukraine, wheat prices continue to rise, which exacerbates people's fears of food crisis. It is reported that Russia and Ukraine are already big wheat exporters, exporting 55.32 million tons of wheat in 2020, accounting for about 25% of total exports, and exporting to more than 50 countries such as Africa, Europe and Central Asia.
However, due to special influences, it is difficult for Russian and Ukrainian wheat to be exported smoothly to the world, and wheat fields in many parts of Ukraine have been affected by the war and reduced production, which will inevitably lead to a significant reduction in wheat production in the new season. At the same time, Russia's fertilizer exports have decreased, which once again exacerbates the risk of reduced grain yields per acre.
But since the conflict in February, major buyers around the world have set their sights on India, the second-largest wheat producer. It is reported that China's wheat production in 2021 is 137 million tons, the largest producer, while India is 110 million tons, the second largest producer. But even so, the mainland imported 9.77 million tons of wheat last year to ensure universal food security.
In contrast, India has increased its wheat imports, importing 7.85 million tons of wheat last year, and only 2.1 million tons in 2020. The reason for the low export volume of Indian wheat in the past is that the flour yield rate is only 87%, the export advantage is not large, and importing countries import it for feed use.
However, since the situation in Russia and Ukraine, Indian wheat has become a fragrant feast, and has signed export orders with Egypt, Turkey and other countries. Exporting 1.4 million tonnes of wheat in April and expecting to import 10 million tonnes this year, it would be on par with Argentina, the seventh-largest wheat exporter, if it does.
If India wants to increase wheat exports, why did it suddenly ban wheat exports?
In fact, India is also powerless, but unfortunately, the heavens are not beautiful, so that the Indian government has to issue this ban. It turned out that since March, India has been plagued by persistent hot weather and drought.
In April, the average temperature in central India was 37.78°C and in the northwest at 35.9°C, the highest price in 122 years; New Delhi also continued to exceed 40°C for a week, with high temperatures two months ahead.
As we all know, the impact of high temperature on wheat is very large, especially in April, Indian wheat is in the filling period, affected by heat waves and droughts, it is expected that Indian wheat production will be reduced by 15-25%, which makes India only choose to reduce wheat exports.
At the same time, the price of wheat in India has also soared due to the impact of the international market, rising from Rs 20150 to Rs 25000 / ton, which has increased the pressure on the people. To this end, India has reduced its exports to stabilize domestic wheat prices.
02, or exacerbate the global food crisis
According to the latest data from the United Nations, 193 million people around the world are in a state of food supply shortage. As a result of the Russian-Ukrainian conflict, another 43 million people are expected to face hunger this year.
But the danger is not only the disadvantage of Russian and Ukrainian exports, but the decline in the total amount of wheat brought about by extreme weather in many parts of the world. France, for example, a major wheat producer, has suffered a drought this year and is expected to reduce production by 30-50%. There are reports of groundwater depletion in parts of France.
Of course, the North American savannahs and the Pampas Plateau in South America have also suffered unprecedented droughts. As we all know, North America and South America are the main exporters of grain, but due to extreme weather, the wheat production in Argentina and the United States is worrying.
According to some data, 68% of the winter wheat producing areas in the United States are in a serious drought situation, but spring wheat is delayed due to excessive rainfall, such as Minnesota spring wheat planting rate of only 2%, the same period last year was 93%.
The USDA forecasts that total wheat production this year is expected to be 774.9 million tons, a year-on-year decrease of 4.5 million tons, and the European Union, India and Australia, Argentina and the United States are not as good as last year.
Coupled with special reasons in Ukraine, wheat growth and export restrictions will exacerbate the food crisis. Although Russia's growth is not limited, it has long restricted exports, and the cost of exporting wheat is large, which continues to drive global food prices.
It is no wonder that India announced a ban on wheat exports, which the Group of Seven strongly condemned.
03, China is not much affected
Of course, many netizens are also worried that China will be affected, in fact, the mainland wheat production is enough to be self-sufficient, and there is a slight surplus. As the world's largest wheat producer, the mainland has actively imported and expanded its grain reserves, which is even more guaranteed for national food security.
Although nearly 10 million tonnes of wheat were imported last year, most of them were used for feed demand. The per capita grain share of the mainland is 470 kg, far exceeding the international 400 kg, which means that the rice bowl of the Chinese is firmly in its own hands.
In addition, the mainland's biggest confidence is that the grain reserves are 670 million tons, and the wheat and rice stocks can feed 1.4 billion Chinese 18 months, so there is no need to worry.