International Business: India’s wheat export ban jolts markets – Gulf Digital News

International Business: India’s wheat export ban jolts markets – Gulf Digital News

LONDON: Wheat importers in Asia were scrambling to find new sources of supply yesterday after India banned exports of the grain at the weekend in a bid to keep a lid on soaring domestic prices, trade sources told Reuters.

Importers, especially those in Asia, were banking on wheat from India, the world’s second-biggest producer, after exports from the Black Sea region plunged following Russia’s Feb. 24 invasion of Ukraine.

Russia and Ukraine jointly account for about 30 per cent of global wheat exports. Ukraine’s exports are severely hampered because the war has forced it to close its ports, while Russia’s exports have been hit by Western sanctions.

Benchmark wheat futures in Chicago jumped by their 6pc limit yesterday as markets reacted to the surprise ban, which came just days after New Delhi said it was targeting record wheat shipments of 10 million tonnes this year.

Its policy reversal now means only exports backed by letters of credit, or payment guarantees, issued before May 13 can proceed. That equates to only about 400,000 tonnes, industry sources told Reuters, adding that 1.8 million tonnes is now trapped at the country’s ports.

Traders holding that wheat face heavy losses because they will have to cancel their export deals