Photo: T. Narayan | Bloomberg | Getty Images
As Russia and Ukraine continue their dispute, many countries have already imposed bans on their exports, with India being the latest. Last week, India announced a ban on its wheat exports.
Wheat prices in the global market shot up 6% on Monday following India’s announcement. The country is considered one of the world’s largest wheat exporters, only second to the combined wheat exports from Ukraine and Russia.
Russia and Ukraine’s wheat exports account for a total of 29% of the global supply. The conflict between them has damaged the market, leaving traders anxious about their ability to meet increasing demands. Prices are expected to soar higher should the war continue, with more bans imposed by other countries on their exports.
The Peterson Institute for International Economics has noted that Russia’s invasion of Ukraine came at a bad time for global food markets, considering the COVID-19 crisis is causing prices to go up.
Russia and Ukraine are among the top exporters of not only wheat but also other products like sunflower, sunflower oil, barley, and maize. To top this, other countries like Egypt, Kosovo, Kazakhstan, and Serbia have also announced bans on wheat exports.
Food security fears amid crisis
With inflation worsening, markets are starting to experience price hikes on many products. The pandemic and recent conflicts in Russia have caused prices for food items such as palm oil or grains to increase significantly. In addition, there’s a looming concern that other products will soon follow suit due to the ongoing economic trend.
The heat has been a significant player in global inflation. For example, India’s ban on wheat exports was due to low production caused by the intense heat. Similarly, the increase in average temperatures led US gas prices to soar as well.
As the war in Russia continues, food shortages are likely to happen. When this happens, more countries may turn their attention toward restrictions on trade, according to an analyst from PIIE. In addition, the Financial Times pointed out that if Russia keeps its blockade on Ukrainian ports, the supply chain will be further disrupted.
What other countries are banning
PIEE keeps track of the list of countries that have ordered export bans on their products. Here is the list:
- Argentina (Soybean oil, soybean meal)
- Algeria (Paste, wheat derivatives, vegetable oil, sugar)
- Egypt (Vegetable oil, maize)
- India (Wheat)
- Indonesia (Palm oil, palm kernel oil)
- Iran (Potatoes, eggplant, tomatoes, onion)
- Kazakhstan (Wheat, wheat flour)
- Kosovo (Wheat, corn, flour, vegetable oil, salt, sugar)
- Turkey (Beef, mutton, goat meat, butter, cooking oils)
- Ukraine (Wheat, oats, millet, sugar)
- Russia (Sugar, sunflower seeds)
- Serbia (Wheat, corn, flour, oil)
- Tunisia (Fruits, vegetables)
- Kuwait (Chicken meat products, grains, vegetable oils)
Like India, the countries have initiated the ban to meet domestic demands as prices in their markets soared following the crisis. The export bans will be lifted, as per the record, in mid to late this year. However, the dates may be subject to change depending on the developments concerning the Russian-Ukrainian war and the climate crisis.
Opinions expressed by US Insider contributors are their own.