Wheat, as one of the most important staple foods around the world, ensures global food security and its supply is now under threat. Recently, wheat prices in the markets in Europe reached a new high of 437.75 euros per tonne and the prices increased more than 50% year-to-date. Extreme weather worldwide, the ban on wheat export by India, and the Russian invasion of Ukraine, which is known as “the breadbasket of Europe”, are the major reasons for the increasing prices and global food insecurity.
Extreme Weather Around the World
The US, the second-largest cereal producer in the world with an output of 485 million tonnes in 2021, anticipated a low output of wheat in 2022 due to low rainfall in major wheat-producing areas, including Kansas and Oklahoma. The US is one of the largest wheat markets with a value of $9 billion in 2021. France, the EU’s largest wheat producer with a market value of $7.8 billion in 2021, is facing a rain shortfall and a record level temperature, which could affect wheat production. A scorching heatwave in India could result in low wheat output this year; the country recorded its warmest March in 122 years according to India Meteorological Department. India is the second-largest wheat market valued at $21.5 billion and one of the largest producers of cereals with an output of 283 million tonnes in 2021.
Ban on Wheat Export by India
Recently, India announced a ban on wheat exports owing to the increasing inflation, estimates of low output due to heatwaves, and the need to maintain food security in the country. Countries such as Bangladesh, Nepal, Sri Lanka, and UAE would be affected by the export ban as India is one of the major exporters to these countries. India exported around 6.6 million tonnes of wheat mainly to the neighboring countries from April 2021 to February 2022, according to the Indian Department of Commerce.
Russian Invasion of Ukraine
The war disrupted the supply of wheat globally as Russia and Ukraine together account for the export of more than 25% of the world’s wheat; with Egypt and Turkey being the major importers. The war poses a significant threat to the countries in Africa, the region most affected by hunger, as one-third of their wheat comes from the two war-torn countries according to a UN report.
The combination of increasing food prices, trade restrictions, geopolitical tensions, and climate change will place a huge burden on households in developing-countries, squeezing real income and limiting economic growth.
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