A growing threat to food security will put Indian Prime Minister Narendra Modi in a dilemma: continue to send wheat to war-torn countries in Ukraine or stockpile food to deal with the high .
According to a report by Bloomberg, the intense heat waves have caused damage to wheat crops throughout the country of South Asia, prompting the government to consider export restrictions. While the Ministry of Food has stated that it is not yet considering controlling wheat exports, it is an issue that is expected to gain momentum and have political implications for Monti and Bharatiya Janata’s ruling party.
Monti has sought to improve his reputation as a credible world leader, but is facing a wave of record-breaking frustration at home, an issue that ousted the previous government and paved the way for his rise to power.
“At a time when the world is facing a shortage of wheat, Indian farmers have come forward to feed the world,” Monti said this week at a rally of the Indian Diaspora in Germany. “Every time humanity faces a crisis, India finds a solution.”
After the war caused problems in the supply chain in the Black Sea region, which accounts for about a quarter of world grain trade, India tried to fill the gap.
Egypt, the world ‘s largest buyer of wheat, recently approved India as a source of imports. Last month, Food and Trade Minister Piyush Goyal said India hoped to become a permanent exporter of wheat, exporting up to 15 million tonnes this year, up from about 7.2 million tonnes in 2021-22. Officials are pushing the World Trade Organization to relax the rules so India can export from state reserves, Goyal said.
But domestic challenges have come to the fore in recent weeks. Hundreds of acres of wheat crops were damaged during the warmest March ever recorded in India, causing production to potentially fall by up to 50% in some pockets of the country, according to a Bloomberg survey.
Franck Gbaguidi, senior analyst at political risk advisory firm Eurasia Group, said crop damage would limit India’s ability to cover wider supply shortages, whether or not exports continue. Wheat consumption in the world’s second most populous country is estimated at 107.9 million tons, according to the US Department of Agriculture.
“With the current effects of the heatwave, India’s claim that it will ‘feed the world’ by exporting wheat surpluses – if allowed to do so by the World Trade Organization – sounds empty,” he said.
With supply chains disrupted by war, rising tolls and extreme weather, domestic inflation is rising, especially for cereals and edible oils.
India raised its key interest rate in a surprise move on Wednesday, sending bonds and stocks falling. In March, the Consumer Price Index rose to a 17-month high of 6.95%.
In an online news release, Shaktikanta Das, the governor of the Central Bank of India, said that inflationary pressures are becoming more intense, especially in food. Retail prices for wheat averaged about 29 rupees per kilogram on May 5, up about 7% from a year earlier. And wheat flour is trading at close to 33 rupees, up 8% from last year, according to government figures.
“This is a major political dilemma facing his government: to seize the opportunity to portray Monti as a world leader in the face of a potential domestic food shortage that could affect his popularity and electoral prospects,” said Shilp Shikha Singh. Assistant Professor at the Giri Institute for Development Studies in Lucknow.
However, Singh said the Bharatiya Janata party was likely to prioritize protecting the prime minister’s reputation as a politician on the world stage, even as his government tackles local elections scheduled for the end of the year and weighs off compensation. benefits of exporting more wheat.
Since taking office in 2014, Monti has sought to play a greater role in shaping global affairs, either by encouraging foreign investment through tax incentives or by supplying millions of coronavirus vaccines. This decision revealed the consequences of such an overstepping: When the Delta variant struck India mercilessly in 2021, the government rushed to boost domestic vaccine supplies after sending so much abroad.
The Indian government said on Thursday it saw no reason to control wheat exports at this time. But the calculation may change: Wheat production is set to fall to 105 million tonnes in 2021-22, according to the latest estimates. This is lower than the previous forecast of 111 million tons (high of all time) and last year’s harvest of 109.6 million tons.
Singh said the decision to revise the wheat exports up or down was ultimately up to the prime minister’s office. “Monty’s image is important and the party is investing a lot in it,” he said.
Source: Capital
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