Wheat price, which has remained high since the start of the war in Ukraine, broke a record again in the European market this Monday (16), after India announced that it would suspend grain exports.
Tons of bread wheat closed at Euronext today at 438.25 Euros, an absolute record for grain that is already traded for gold in the world market.
“This is an absolute record for all Euronext maturities. The previous record dates back to March 7, 2022, when wheat closed at 422.50 euros per tonne,” Inter-Courtage broker Damien Vercambre told AFP.
India, the world’s second-largest wheat producer, banned grain exports on Saturday unless there is special government permission. The decision was made at a time when the country was experiencing a decline in production due to extreme heat waves.
New Delhi, which had previously promised to supply wheat to fragile countries dependent on Ukraine’s exports, claimed that the decision was aimed at ensuring “food security” for its 1.4 billion population.
Also on Saturday, G7 agriculture ministers said the suspension of India’s wheat exports would “aggravate the crisis” in world grain supplies caused by the Ukraine war.
“Markets are now reacting more strongly as India’s embargo on wheat exports contradicts previous promises on world supply,” said Gautier Le Molgat, analyst at agricultural consultancy Agritel.
– Alternatives to Ukraine’s wheat – In world markets, the turmoil in world markets is even greater as India, which was initially an average exporter of wheat, is on track to become a major player in the sector: it exported 7 million tons in 2021 and claimed to reach 10. million has become one of the possible alternatives to Ukrainian wheat this year.
Prior to the conflict that began with the Russian invasion on February 24, Ukraine was the world’s fourth-largest exporter of corn and was becoming the world’s third-largest supplier of wheat.
According to the forecasts of the US Department of Agriculture (USDA), which predicts that Kiev will have an export capacity of only 10 million tons in 2022, compared to 19 million tons a year ago, wheat production may fall drastically this year.
The price of wheat has increased 40% since the start of the war and remains high due to drought risks in the United States and Western Europe.
In this context and with the ongoing war with Ukraine over time, the promise of Indian wheat relieved the markets, especially the Middle East and Asia, which are India’s traditional customers.
For observers, prices will remain high as “demand will always be there”.
source: Noticias
