MercoPress. South Atlantic News Agency

Thirty five countries have restricted exports to help domestic consumers but global prices have soared

India, which is usually among the five wheat exporter in the world, announced a ban on foreign sales of the cereal in an effort to protect domestic consumer prices

At least thirty five countries have restricted exports of agricultural commodities in the last two years because of the Covid 19 pandemic and more recently, the explosion of prices as direct consequence of the Russian invasion of Ukraine and the overall instability in markets.

A few days ago Brazil's Confederation of Agriculture and Livestock, CNA organized a conference to discuss food prices in the world and future challenges, and senior economist Otaviano Canuto, from the Policy Center for the New South said that ”what is happening now with food prices resembles the global food price crisis in the first decade of the 2000s. He cited India as a recent example of a country that restricted exports.

India, which is usually among the five wheat exporter in the world, announced a ban on foreign sales of the cereal in an effort to protect domestic consumer prices. But, “this immediately affected wheat prices, which rose 6% as soon as markets opened the following Monday.”

Canuto recalled the case of Indonesia, which contributes 65% of global palm oil exports, and recently decided to restrict sales of this product. “This decision caused vegetable oil prices to explode.”

Furthermore, the wheat crop failure in China, “one of the worst ever recorded,” according to Canuto, “as well as high temperatures in India between March and April, which hit hard the wheat belt,” could worsen the situation and cause food prices to rise even more.

The economist recalled that, before the Indian restrictions, the wheat crop in the country made up for some gaps left by Ukraine, another major exporter, as well as Canada, which has also suffered from bad weather damaging its crops. In addition, sunflower oil is an important food item affected by the conflict between Russia and Ukraine, as two-thirds of the world’s supply depends on these two countries.

“The conflict in Ukraine has damaged the country’s ports and agricultural structure, limiting its food exports for a long time,” said Canuto. “Ukrainian exports have dropped from 5 million tons a month to 500,000 tons a month, not to mention the wheat stored in Ukrainian ports that Russia won’t let out.”0