On Friday, wheat prices increased as India considered extending their ban on exports as it attempted to lower domestic prices.
The US wheat futures for March delivery went up by 0.17% to $756.80 per metric ton on February 10’s Asian afternoon session.
India’s current embargo was set to be reviewed in April. Important officials for food, farm, and trade ministries will make decisions about the restriction. It can possibly extend once they decide around March or early April. Also, they added that they do not expect wheat exports to continue until mid2024.
Furthermore, a 47.9%-to-17.20-million-ton drop in government warehouses took place on January 01, their lowest in six years.
In 2023, analysts expect India to gather around 112.00 million tons of wheat, hitting a high record.
Moreover, domestic prices hit an all-time high of $393.53 per ton in January. It marks the price that the government would buy the commodity from local farmers this year.
Additionally, it purchased rice and wheat from farmers at state-set costs to run the world’s most powerful food program.
In the previous year, its bargain in the state dropped by 53.00% to 18.80 million tons. As a result, market prices increased over the rate at which the government buys the grains from local farmers.
War in Russia and Ukraine Affects Wheat Market
Russia’s invasion of Ukraine significantly impacted the grain market like wheat. Mainly, the invaded country has a significant role as a leading producer.
For 2021, the two countries are responsible for 23.10% of the global wheat exports. According to analysts, the Soviet Union’s shipments will go down to 7.90%, while Ukraine will have a 10.10% increase in their shipping.
Besides, the European Union is working on developing Solidarity Lanes so that grains from Kyiv reach their final recipients. The EU initiated it to avoid migration waves and social unrest, mainly in Africa. These lanes were developed for the nation to export 15.00 million metric tons of grains and other commodities. In addition, it targets an agricultural connection between European shippers and Ukrainian producers.