There are two main causes of inflation: demand-pull and cost-push. Both are responsible for a general rise in prices in an economy, but each works differently to put pressure on prices. Demand-pull conditions occur when demand from consumers pulls prices up, while cost-push occurs when supply costs force prices higher.
Some sources cite a third cause of inflation: expansion of the money supply. However, the Federal Reserve explains that the relationship of money supply to inflation has decreased over time, and is not a separate cause of its own.
To stop the rise in prices, the government has outlawed the export of wheat flour, maida, semolina, and wholemeal atta. The government had already prohibited the export of wheat in May.
According to the DGFT's notification, the export policy for certain commodities (wheat or meslin flour, maida, semolina, wholemeal aata, and resulting aata) has changed from free to forbidden. Sirgi and rawa are also components of semolina.
To stop the rise in the price of the product, the government decided to impose limitations on the export of wheat or meslin flour on August 25.
The Cabinet Committee on Economic Affairs met and made the choice (CCEA).
The majority of the world's wheat exports, or about one-fourth, come from Russia and Ukraine. The two nations' war has disrupted the world's wheat supply chain, which has raised demand for Indian wheat.
As a result, there has been an increase in the price of wheat on the domestic market.
The government of India imposed a ban on the export of wheat on May 13, 2022. The ban on export was mainly to ensure food security of our country. The reasons which lead to an increase in price of wheat in domestic market is Extreme hot and unfavourable climatic changes which reduced the production of wheat in Northen states of India. The population of India is increasing continously leading to an increase in the demand of wheat, hence leading to increase in price of it. The Russia-Ukraine war, Shri Lanka's economic crises, increased tax rates imposed by the government, low foreign exchange rates, etc are also some of the reasons that lead to an increase in prices of wheat in domestic Markets. Hence due to these reasons the demand of wheat increased in global market and in august a ban was imposed on export of wheat flour and semolina also.
Several factors are pushing wheat price up at home.These include international prices of wheat and rising cost of fuels which have a spill over effect on commodities used from ethonal production such as corn and wheat.Russia and Ukraine being major exporter of wheat to the world due to war,sustained their exports which brought a price hike in international market which lead India to export more at global level leading short age in own country bringing rise in price at domestic level.
India is one of the biggest exporters of wheat. Earlier in May exprot was banned. This increased the demant of wheat flour, so recently on 25th August ban was imposed on wheat flour and semolina. Some of the reasons for this ban are Ongoing Russia Ukraine war. Russia nad Ukraine being major wheat exporters accounts for about one quarter of the global whaet trade. Due to war between two countries, global wheat supply is disrupted leading to higher/increased demand for Indian wheat and hence Indian domestic market is facing its impact i.e. increase in prices of wheat. Government banned wheat exports in May to ensure food security but this increases demand for wheat flour overseas.Wheat flour exports from India have registered growth of 200 percent during Aprit - July 2022 as compared to the same period of 2021. Due to increasing demand of wheat flour overseas had led to increase in the prices in domestic market. Fulfilling demand of such a large population in the midst of pandemic after witnessing hottest heat waves affecting production of food grains in India.Due to this, the Cabinet Committee on Economic Affairs (CCEA) took a decision on 25th August to ban on export of Wheat flour to check rising commodity prices and to control the rising inflation in the country.
On August 25, the government decided to put restrictions on the export of wheat or meslin flour to curb rising prices of the commodity. The decision was taken at a meeting of the Cabinet Committee on Economic Affairs (CCEA). “The Cabinet Committee on Economic Affairs has approved the proposal for amendment of policy of exemption for wheat or meslin flour from export restrictions/ban,” an official statement has said. Russia and Ukraine are the major exporters of wheat, accounting for a major part of the global wheat trade. The war between the two countries has led to global wheat supply chain with unsettling confusions, thus increasing the demand for Indian wheat. As a result, the price of wheat in the domestic market has shown an increase. The all-India average retail price of wheat has risen by over 22 per cent to Rs 31.04 per kg as on August 22, compared to Rs 25.41 per kg in the year-ago period, according to data maintained by the consumer affairs ministry. The average retail price of wheat flour (Atta) has increased by over 17 per cent to Rs 35.17 per kg as against Rs 30.04 earlier, the data showed.
Comparative data for the Consumer Food Price Index – a measure of the change in the price of foods consumed by a typical family in India – available from January 2014, produces similar results: prices have increased by 70% between January 2014 and March 2022.
“Inflation happened because of global factors like commodities (such as agricultural produce) price rise, energy price rise and interest rate hikes by the United States Federal Reserve, as well as supply side factors caused by Covid-induced lockdowns,” explained Lekha Chakroborty, professor of economics at the National Institute of Public Finance and Policy.
When the price of inputs for producers of goods and services increases, they pass it on to the consumers in the form of higher prices. While the demand for goods and services has been low since the pandemic, the supply has been even tighter, because of the rise in fuel prices and the Russia-Ukraine war, said Sengupta.
Ukraine and Russia, the two countries accounting for nearly 25% of global wheat trade are at war. Due to this, the global wheat supply sustained a significant shock. Global demand for wheat far outweighed the supply thus increasing international wheat prices. On the other hand, India, whilst being in the middle of a global pandemic, also witnessed one of the most intense heatwaves in history, thus creating a scarcity of crops.
The supply chain has therefore been disrupted and there is a higher demand for wheat flour, maida and semolina both in the international and domestic market. India has a high quality of wheat that is in demand in the international market currently, and it is therefore a good chance to penetrate the market. With producers preferring to export goods instead of domestically selling them, there was bound to be a rise in prices.
Due to this, the Cabinet Committee on Economic Affairs curbed the exports in an attempt to control the rising prices and keep a check on inflation rates. Due to the already volatile nature of the global economy due to the pandemic, inflation rate could very quickly turn a recession into a depression and it is imperative for the Government of India to prevent that from happening
The decision was taken by the Cabinet Committee on Economic Affairs (CCEA), in May, chaired by Prime Minister Narendra Modi.
The Indian government did not just restricted exports of wheat but also on other related products like maida, semolina , wholemeal atta and resultant atta. Due to the ban, the demand for wheat overseas rised when in turn led to Increased demand for wheat flour in the domestic market .Russia and Ukraine are the major exporters of wheat accounting for around one-fourth of the global wheat trade. The war between the two countries has led to global wheat supply chain disruptions, thereby increasing the demand for Indian wheat.The demand for wheat flour increased in foreign markets leading to a growth in exports of wheat flour by 200 per cent from last year. As a result, the rise in price of wheat in International market led to an increase in price in the domestic market as well. India is concerned about people who does have real scarcity of food, so those country can contact on government level and get the food first. The main reason for the ban was to manage the overall food security of the country , to support the needs of the neighbouring and other vulnerable countries and also our reliability as a supplier being maintained by not reneging on any existing contract.But the g7 opposed the India's wheat ban due to rising price and a decline in the production of the crop.
Before the ban, India aimed to ship a record of 10 million this year.
India witnessed 2 deadly covid waves which reduced economic activity meanwhile the world including India was witnessing the hottest summer of the year which not only reduced productivity of people but also affected weat and other food production in India. Uneven climatic changes also affected food production. Other reason would be supply chain disruptions at times of covid and after covid led to increasing prices of wheat and stuff. Food processing industry was also affected mainly due to power outages and unproductive labour supply.
Ukraine and Russia, the two countries accounting for nearly 25% of global wheat trade are at war. Due to this, the global wheat supply sustained a significant shock. Global demand for wheat far outweighed the supply thus increasing international wheat prices. This incentivised Indian exporters to export more Indian wheat to global markets thus decreasing the supply of wheat in domestic markets. The results? Increased price of wheat domestically.Wheat flour exports from India have registered a growth of 200 per cent during April-July 2022 compared to the corresponding period in 2021. Wheat prices in both wholesale and retail markets have also come under pressure due to a nearly 3 per cent drop in the domestic output to 106.84 million tonnes in the 2021-22 crop year.
The Cabinet Committee on Economic Affairs...has approved the proposal for amendment of policy of exemption for wheat or meslin flour from export restrictions/ban," an official statement has said.Russia and Ukraine are the major exporters of wheat, accounting for around one-fourth of the global wheat trade. The war between the two countries has led to global wheat supply chain disruptions, thus increasing the demand for Indian wheat.As a result, the price of wheat in the domestic market has shown an increase.
Just today - India banned export of broken rice and added 20 % duty on various grades of rice on similar lines and reasons. India is one of largest suppliers of rice. It supplies broken rice to 150+ countries. China in 2021, Vietnam, Pakistan, Thailand etc. It can lead to global food shortage and food inflation as well. The reasons for the situation and decision are again the same - Russia Ukraine war, Heat wave etc.
If facts been put forward clearly and precisely - India is a top-most exporter of wheat to so many countries across the world, wheat being consumed globally at greater extent as a basic necessity or raw material for making food, it has it's own national demand as well which is supposed to be fulfilled. Fulfilling demand of such a large population of own country and others isn't a easy task and with that a long ongoing war between Russia and Ukraine which's second fact and reality. Maintaining global relations is indeed crucial but what is also important is basic human security of all citizens living in country, protecting their fundamental right. So as war is going on India's exports from both of countries has reduced - to nearly half from russia which's facing a backlash for war and economic sanctions as well. Global prices of wheat rose with that since there was now increase in demand after Government of India decided to ban on exposrts.Even in India, population is rising and ao demand is increasing. Rise in prices and higher level of global demand was seen. There was also less production because of heat waves in wheat producing states. So prices rose further.
To maintain inflation of this and controlling economic activities to fulfill basic needs of it's own citizens - Indian government righteously put ban on it's exports of it's listed commodities for making food prices and keeping it's own interests secure. The ban was put forward on 25th of August.
As it's in the news that India banned wheat exports within the country to control the rising price, govt still says that it will allow exports backed by already issued by letters of credits. And the country has asked food suppliers to meet the requirement within the country. This statement was issued by Directorate general of Foreign Trade, it also says that it is done to resolve problems of food security within country, neighboring and other vulnerable countries.
Directorate says that it will be serving 3 purposes:
1) Maintains food security for country.
2) helps others who are in distress, further he added that although there are new country in the market who are actually there to by wheat, countries who use to buy from Ukraine and Russia like North Africa, Turkey and so on but because of war it got collapsed and if their govt take any call India would definitely respond to the best of its capacities.
3) country's reliability as a supplier is not maintained on the existing contracts, and this can gave boost to new contracts within the nation.
The govt further says that the cut in export is not because of lack of production but because of irregular export which leads to price rise within country, because of irregular supply and black sea invasion to Russia this ban was necessary.
This move of India's ban on export was not well welcomed by G7, as it says it affects countries like Bangladesh and Nepal and further added that it will have a meeting with India to resolve over issue.
So to say- the war halted/reduced the supply of these commodities resulting in a higher demand of them from other countries. Higher demand for exports increased prices & encouraged people to export them rather than selling in the domestic market.
Heat waves do arise every year in country but these time intensity or timings were different than usual and it also affected larger areas, cultivation spots or fields, especially the states who produce wheat the most were affected with the heat waves and so with that there was considerable impact on net production in this year which resulted into lower output/production and so...hike in prices and goverment saving it for nation by putting forward the restrictions
On August 25, the government decided to put restrictions on the export of wheat or meslin flour to curb rising prices of the commodity.
The decision was taken at a meeting of the Cabinet Committee on Economic Affairs (CCEA)
The Cabinet Committee on Economic Affairs...has approved the proposal for amendment of policy of exemption for wheat or meslin flour from export restrictions/ban.
In order to ensure food security of the country, the government put a prohibition on export of wheat in May. However, this caused a jump in overseas demand for wheat flour.
Wheat flour exports from India have registered a growth of 200 per cent during April-July 2022 compared to the corresponding period in 2021
The increased demand for wheat flour overseas led to significant price rise of the commodity in the domestic market.
On August 25, govt decided to put restrictions On the export of wheat flour or meslin flour to curb rising.this decision was taken by committee members of economics affairs (CCEA).
Russia - Ukraine are the major exporters of wheat, accounting for a round one-fourth of the global wheat trade . The war between these two countries has led to global wheat supply chain disruptions,this increasing the demand for Indian wheat.in order to ensure food security of the country, the govt. Put the prohibition on export of wheat in May .However,this caused the jump in overseas demand for wheat flour. The increased demand for wheat flour overseas led to significant price rise of the commodity in the domestic market.
1•Well talking about the ban of wheat export ..... In May, India banned wheat exports in a bid to check high prices amid concerns of wheat output being hit by a scorching heat wave. After banning wheat exports in May, the government has imposed restrictions on outbound shipments of wheat flour or atta, maida and semolina, a move aimed at containing price rise.
2•Inflation is a measure of the rate of rising prices of goods and services in an economy. If inflation is occurring, leading to higher prices for basic necessities such as food, it can have a negative impact on society.
A surge in demand for products and services can cause inflation as consumers are willing to pay more for the product. Demand-pull inflation occurs when an increase in the supply of money and credit stimulates the overall demand for goods and services to increase more rapidly than the economy's production capacity. This increases demand and leads to price rises.
Ban on the export of wheat was held int he may. The war between the two countries, Russia and Ukraine has led to increase in demand for wheat flour, which was basically the reason of the ban. This cut in the export caused an increase in the demand for wheat overseas. The reason on the ban is also to ensure food security of the country. Due to the heat waves in the northern states of Panjab and Haryana, there is a decline in the wheat production. The Cabinet Committee on Economic Affairs (CCEA) declared the ban on export of maida and semolina, after that.
In recent news, one occasionally comes across the ban that the Government of India imposed on the export of wheat, flour, maida, and few other commodities, to help curb the rising costs of these commodities. One then wonders, why the prices for these items have risen and how this ban will help combat the issue. In order to understand the whole situation, one must observe the global events. Russia and Ukraine were the largest exporters of wheat and other items, and earlier this year Russia invaded Ukraine, this resulted in a halt of production and exports in Ukraine, additionally Russia too stopped exports while facing extreme trade sanctions. This resulted in a global shortage of these commodities, causing an unprecedented increase in their costs. India being a large exporter of these goods was also approached by several nations, and due to this, the domestic price also saw an increase as foreign nations offered more to the sellers, moreover, unfavourable natural conditions resulted in a lower output, and with an ever growing population, the demand for wheat wasn’t able to be matched by the producers, as a result the prices rose even more. On noticing this threat on the nation’s food security, the government has imposed a ban on the export of these commodities, until the domestic needs are met, this was also done to ensure that their costs remain controlled, and accessible by the general public.
The Indian government has banned wheat flour exports with immediate effect in order to address a slew of issues ranging from lower-than- expected production to soaring inflation mainly arising out of the Russia- Ukraine war.
The export ban has been triggered by factors such as fears of a six - years low production of wheat this year, since 2016 when the output was 92.29 mt, amidst high demand for exports in view of the Russia-Ukraine war and a sharp drop in procurement for buffer stocks by the Food Corporation of India (FCI).
The Main reason for wheat ban:
The Ukraine war is seen as primary reason for not just the rise in wheat prices but also other commodities such as maize, oilseeds and edible oils.Russia and Ukraine supply nearly 60 mt Or 30 per cent of wheat to the global market, while Ukraine is a crucial source of maize and sunflower oil supplies.
• Traders and analysts say the ban could be "temporary" and the Center could allow shipments once it gets a proper assessment of the wheat situation in the country. According to official sources said the Center will consider wheat on a government-to- government basis.
• The government order curbing wheat exports also said the move was "to manage the country's overall food security and support the needs of neighbouring and vulnerable countries".
If we see the reason of high prices there are many.
High price is caused many factors.
Gov. Ban the export of maida wheat flour because
1) that country is unable to full fill their own demand of wheat flour etc
2) In todays time , due russian ukraine war there is a shortage of wheat supply due to major producer of wheat for europe is russia -ukraine. This another reason
Because if there is too much increase of wheat export from one country that country would unable too full fill their own demand
3) Another reason for higher prices in domestic market is higher demand and lesser production
4) natural calamity such as flood , drought , earth quake etc
Factors that can reduce the higher prices are
1) Gov should make some effective policy to curb higher prices .
2) Gov should assure some guarnte to affected farmer of wheat , semolina for the next year good harves
India banned wheat export on May 13 with immediate effect of Russia ukrain war to cantrol rising price and as heatwave across the country affects the domestic output of wheat .india not deal with huge amount of wheat export in global market .india account less than 1% wheat export in global market .Indian commerce ministry Piyush Goyal said at the economic forum annual meeting 2022 india export less than 1 %of wheat in global market it will not effect the global market.
According to the government source , india ranked 19 in 2020 of wheat export.india is the second largest Producer of wheat and biggest consumer of wheat .
Reason behind wheat ban :there are two main reason behind wheat ban (1) rising price of wheat because of ongoing war between Russia and Ukraine , these countries are the largest producer of wheat and most of the country are dependent on them ,it will lead to the shortage of wheat in global market .
Second 2 reasons : ban was also prompted because the wheat production is decreased due to heatwave .
After banning wheat exports in May, the government on Saturday prohibited exports of wheat flour, maida, semolina, and whole meal aata with a view to curb rising prices. Notifying a decision of the Union Cabinet. The Directorate General of Foreign Trade (DGFT), however, said that exports of these items would be allowed subject to permission of the government of India in certain cases. The decision was taken at a meeting of the Cabinet Committee on Economic Affairs (CCEA).“The Cabinet Committee on Economic Affairs…has approved the proposal for amendment of a policy of exemption for wheat or meslin flour from export restrictions/ban,” an official statement has said. Russia and Ukraine are the major exporters of wheat. Accounting for around one-fourth of the global wheat trade. The war between the two countries has led to global wheat supply chain disruptions. Thus, increasing the demand for Indian wheat.As a result, the price of wheat in the domestic market has shown an increase. In order to ensure the food security of the country, the government put a prohibition the export of wheat in May. However, this caused a jump in overseas demand for wheat flour. Earlier, there was a policy not to prohibit or put any restriction on the export of wheat flour and therefore. A partial modification of the policy was required by withdrawing the exemption from ban/restrictions on export in order to ensure food security. And put a check on mounting prices of wheat flour in the country.
Wheat was banned from export this May. The reason was the ongoing war between Russia and Ukraine. Russia and Ukraine are the major exporters of wheat. Due to the war, now Indian wheat saw an increase in its demand. A price rise of the commodity was seen in India. A decrease in wheat production was also seen due to heatwaves in Punjab and Haryana. To ensure food security in India, the govt had to imply a ban on wheat export. Last week, the govt decided to ban the export of wheat flour, maida and semolina as well to restrain the increasing prices. The decision was made in a meeting of the CCEA.
There has been a tremendous increase in the population of India. This has increased the numbers of mouth to feed, needs to fulfill and requirements of jobs. But since the resources increase a slower pace while the population in multiplying, there is an increase in price
There are two main causes of inflation: demand-pull and cost-push. Both are responsible for a general rise in prices in an economy, but each works differently to put pressure on prices. Demand-pull conditions occur when demand from consumers pulls prices up, while cost-push occurs when supply costs force prices higher.
Some sources cite a third cause of inflation: expansion of the money supply. However, the Federal Reserve explains that the relationship of money supply to inflation has decreased over time, and is not a separate cause of its own.
To stop the rise in prices, the government has outlawed the export of wheat flour, maida, semolina, and wholemeal atta. The government had already prohibited the export of wheat in May.
According to the DGFT's notification, the export policy for certain commodities (wheat or meslin flour, maida, semolina, wholemeal aata, and resulting aata) has changed from free to forbidden. Sirgi and rawa are also components of semolina.
To stop the rise in the price of the product, the government decided to impose limitations on the export of wheat or meslin flour on August 25.
The Cabinet Committee on Economic Affairs met and made the choice (CCEA).
The majority of the world's wheat exports, or about one-fourth, come from Russia and Ukraine. The two nations' war has disrupted the world's wheat supply chain, which has raised demand for Indian wheat.
As a result, there has been an increase in the price of wheat on the domestic market.
The government of India imposed a ban on the export of wheat on May 13, 2022. The ban on export was mainly to ensure food security of our country. The reasons which lead to an increase in price of wheat in domestic market is Extreme hot and unfavourable climatic changes which reduced the production of wheat in Northen states of India. The population of India is increasing continously leading to an increase in the demand of wheat, hence leading to increase in price of it. The Russia-Ukraine war, Shri Lanka's economic crises, increased tax rates imposed by the government, low foreign exchange rates, etc are also some of the reasons that lead to an increase in prices of wheat in domestic Markets. Hence due to these reasons the demand of wheat increased in global market and in august a ban was imposed on export of wheat flour and semolina also.
Several factors are pushing wheat price up at home.These include international prices of wheat and rising cost of fuels which have a spill over effect on commodities used from ethonal production such as corn and wheat.Russia and Ukraine being major exporter of wheat to the world due to war,sustained their exports which brought a price hike in international market which lead India to export more at global level leading short age in own country bringing rise in price at domestic level.
Indian government banned wheat export mainly because of :-
- Indian wheat production has reduced due to excess heat wave in the North India .
- The ban aimed to improve supply of wheat in the domestic market .
- In order to address the price rise and to achieve price stability .
- There will be food security risk in India , since wheat prices are soaring globally due to Ukraine and Russia war.
India is one of the biggest exporters of wheat. Earlier in May exprot was banned. This increased the demant of wheat flour, so recently on 25th August ban was imposed on wheat flour and semolina. Some of the reasons for this ban are Ongoing Russia Ukraine war. Russia nad Ukraine being major wheat exporters accounts for about one quarter of the global whaet trade. Due to war between two countries, global wheat supply is disrupted leading to higher/increased demand for Indian wheat and hence Indian domestic market is facing its impact i.e. increase in prices of wheat. Government banned wheat exports in May to ensure food security but this increases demand for wheat flour overseas. Wheat flour exports from India have registered growth of 200 percent during Aprit - July 2022 as compared to the same period of 2021. Due to increasing demand of wheat flour overseas had led to increase in the prices in domestic market. Fulfilling demand of such a large population in the midst of pandemic after witnessing hottest heat waves affecting production of food grains in India. Due to this, the Cabinet Committee on Economic Affairs (CCEA) took a decision on 25th August to ban on export of Wheat flour to check rising commodity prices and to control the rising inflation in the country.
On August 25, the government decided to put restrictions on the export of wheat or meslin flour to curb rising prices of the commodity. The decision was taken at a meeting of the Cabinet Committee on Economic Affairs (CCEA). “The Cabinet Committee on Economic Affairs has approved the proposal for amendment of policy of exemption for wheat or meslin flour from export restrictions/ban,” an official statement has said. Russia and Ukraine are the major exporters of wheat, accounting for a major part of the global wheat trade. The war between the two countries has led to global wheat supply chain with unsettling confusions, thus increasing the demand for Indian wheat. As a result, the price of wheat in the domestic market has shown an increase. The all-India average retail price of wheat has risen by over 22 per cent to Rs 31.04 per kg as on August 22, compared to Rs 25.41 per kg in the year-ago period, according to data maintained by the consumer affairs ministry. The average retail price of wheat flour (Atta) has increased by over 17 per cent to Rs 35.17 per kg as against Rs 30.04 earlier, the data showed.
Comparative data for the Consumer Food Price Index – a measure of the change in the price of foods consumed by a typical family in India – available from January 2014, produces similar results: prices have increased by 70% between January 2014 and March 2022.
“Inflation happened because of global factors like commodities (such as agricultural produce) price rise, energy price rise and interest rate hikes by the United States Federal Reserve, as well as supply side factors caused by Covid-induced lockdowns,” explained Lekha Chakroborty, professor of economics at the National Institute of Public Finance and Policy.
When the price of inputs for producers of goods and services increases, they pass it on to the consumers in the form of higher prices. While the demand for goods and services has been low since the pandemic, the supply has been even tighter, because of the rise in fuel prices and the Russia-Ukraine war, said Sengupta.
Ukraine and Russia, the two countries accounting for nearly 25% of global wheat trade are at war. Due to this, the global wheat supply sustained a significant shock. Global demand for wheat far outweighed the supply thus increasing international wheat prices. On the other hand, India, whilst being in the middle of a global pandemic, also witnessed one of the most intense heatwaves in history, thus creating a scarcity of crops.
The supply chain has therefore been disrupted and there is a higher demand for wheat flour, maida and semolina both in the international and domestic market. India has a high quality of wheat that is in demand in the international market currently, and it is therefore a good chance to penetrate the market. With producers preferring to export goods instead of domestically selling them, there was bound to be a rise in prices.
Due to this, the Cabinet Committee on Economic Affairs curbed the exports in an attempt to control the rising prices and keep a check on inflation rates. Due to the already volatile nature of the global economy due to the pandemic, inflation rate could very quickly turn a recession into a depression and it is imperative for the Government of India to prevent that from happening
The decision was taken by the Cabinet Committee on Economic Affairs (CCEA), in May, chaired by Prime Minister Narendra Modi.
The Indian government did not just restricted exports of wheat but also on other related products like maida, semolina , wholemeal atta and resultant atta. Due to the ban, the demand for wheat overseas rised when in turn led to Increased demand for wheat flour in the domestic market .Russia and Ukraine are the major exporters of wheat accounting for around one-fourth of the global wheat trade. The war between the two countries has led to global wheat supply chain disruptions, thereby increasing the demand for Indian wheat.The demand for wheat flour increased in foreign markets leading to a growth in exports of wheat flour by 200 per cent from last year. As a result, the rise in price of wheat in International market led to an increase in price in the domestic market as well. India is concerned about people who does have real scarcity of food, so those country can contact on government level and get the food first. The main reason for the ban was to manage the overall food security of the country , to support the needs of the neighbouring and other vulnerable countries and also our reliability as a supplier being maintained by not reneging on any existing contract.But the g7 opposed the India's wheat ban due to rising price and a decline in the production of the crop.
Before the ban, India aimed to ship a record of 10 million this year.
India witnessed 2 deadly covid waves which reduced economic activity meanwhile the world including India was witnessing the hottest summer of the year which not only reduced productivity of people but also affected weat and other food production in India. Uneven climatic changes also affected food production. Other reason would be supply chain disruptions at times of covid and after covid led to increasing prices of wheat and stuff. Food processing industry was also affected mainly due to power outages and unproductive labour supply.
Ukraine and Russia, the two countries accounting for nearly 25% of global wheat trade are at war. Due to this, the global wheat supply sustained a significant shock. Global demand for wheat far outweighed the supply thus increasing international wheat prices. This incentivised Indian exporters to export more Indian wheat to global markets thus decreasing the supply of wheat in domestic markets. The results? Increased price of wheat domestically. Wheat flour exports from India have registered a growth of 200 per cent during April-July 2022 compared to the corresponding period in 2021. Wheat prices in both wholesale and retail markets have also come under pressure due to a nearly 3 per cent drop in the domestic output to 106.84 million tonnes in the 2021-22 crop year.
The Cabinet Committee on Economic Affairs...has approved the proposal for amendment of policy of exemption for wheat or meslin flour from export restrictions/ban," an official statement has said. Russia and Ukraine are the major exporters of wheat, accounting for around one-fourth of the global wheat trade. The war between the two countries has led to global wheat supply chain disruptions, thus increasing the demand for Indian wheat. As a result, the price of wheat in the domestic market has shown an increase.
Just today - India banned export of broken rice and added 20 % duty on various grades of rice on similar lines and reasons. India is one of largest suppliers of rice. It supplies broken rice to 150+ countries. China in 2021, Vietnam, Pakistan, Thailand etc. It can lead to global food shortage and food inflation as well. The reasons for the situation and decision are again the same - Russia Ukraine war, Heat wave etc.
If facts been put forward clearly and precisely - India is a top-most exporter of wheat to so many countries across the world, wheat being consumed globally at greater extent as a basic necessity or raw material for making food, it has it's own national demand as well which is supposed to be fulfilled. Fulfilling demand of such a large population of own country and others isn't a easy task and with that a long ongoing war between Russia and Ukraine which's second fact and reality. Maintaining global relations is indeed crucial but what is also important is basic human security of all citizens living in country, protecting their fundamental right. So as war is going on India's exports from both of countries has reduced - to nearly half from russia which's facing a backlash for war and economic sanctions as well. Global prices of wheat rose with that since there was now increase in demand after Government of India decided to ban on exposrts.Even in India, population is rising and ao demand is increasing. Rise in prices and higher level of global demand was seen. There was also less production because of heat waves in wheat producing states. So prices rose further.
To maintain inflation of this and controlling economic activities to fulfill basic needs of it's own citizens - Indian government righteously put ban on it's exports of it's listed commodities for making food prices and keeping it's own interests secure. The ban was put forward on 25th of August.
As it's in the news that India banned wheat exports within the country to control the rising price, govt still says that it will allow exports backed by already issued by letters of credits. And the country has asked food suppliers to meet the requirement within the country. This statement was issued by Directorate general of Foreign Trade, it also says that it is done to resolve problems of food security within country, neighboring and other vulnerable countries.
Directorate says that it will be serving 3 purposes:
1) Maintains food security for country.
2) helps others who are in distress, further he added that although there are new country in the market who are actually there to by wheat, countries who use to buy from Ukraine and Russia like North Africa, Turkey and so on but because of war it got collapsed and if their govt take any call India would definitely respond to the best of its capacities.
3) country's reliability as a supplier is not maintained on the existing contracts, and this can gave boost to new contracts within the nation.
The govt further says that the cut in export is not because of lack of production but because of irregular export which leads to price rise within country, because of irregular supply and black sea invasion to Russia this ban was necessary.
This move of India's ban on export was not well welcomed by G7, as it says it affects countries like Bangladesh and Nepal and further added that it will have a meeting with India to resolve over issue.
So to say- the war halted/reduced the supply of these commodities resulting in a higher demand of them from other countries. Higher demand for exports increased prices & encouraged people to export them rather than selling in the domestic market.
One of the largest exporters of wheat, recently, the government of India imposed a ban on its exports. The various causes include:
Russian invasion of Ukraine
Economic crisis in Sri Lanka
Increasing population
Heat Waves- since wheat is a rabi crop, it is harvested in April-May. Hence, the heat waves have affected the yield.
Hence, in order to ensure food security, the government banned the exports of wheat and wheat products.
On August 25, the government decided to put restrictions on the export of wheat or meslin flour to curb rising prices of the commodity.
The decision was taken at a meeting of the Cabinet Committee on Economic Affairs (CCEA)
The Cabinet Committee on Economic Affairs...has approved the proposal for amendment of policy of exemption for wheat or meslin flour from export restrictions/ban.
In order to ensure food security of the country, the government put a prohibition on export of wheat in May. However, this caused a jump in overseas demand for wheat flour.
Wheat flour exports from India have registered a growth of 200 per cent during April-July 2022 compared to the corresponding period in 2021
The increased demand for wheat flour overseas led to significant price rise of the commodity in the domestic market.
On August 25, govt decided to put restrictions On the export of wheat flour or meslin flour to curb rising.this decision was taken by committee members of economics affairs (CCEA).
Russia - Ukraine are the major exporters of wheat, accounting for a round one-fourth of the global wheat trade . The war between these two countries has led to global wheat supply chain disruptions,this increasing the demand for Indian wheat.in order to ensure food security of the country, the govt. Put the prohibition on export of wheat in May .However,this caused the jump in overseas demand for wheat flour. The increased demand for wheat flour overseas led to significant price rise of the commodity in the domestic market.
1•Well talking about the ban of wheat export ..... In May, India banned wheat exports in a bid to check high prices amid concerns of wheat output being hit by a scorching heat wave. After banning wheat exports in May, the government has imposed restrictions on outbound shipments of wheat flour or atta, maida and semolina, a move aimed at containing price rise.
2•Inflation is a measure of the rate of rising prices of goods and services in an economy. If inflation is occurring, leading to higher prices for basic necessities such as food, it can have a negative impact on society.
A surge in demand for products and services can cause inflation as consumers are willing to pay more for the product. Demand-pull inflation occurs when an increase in the supply of money and credit stimulates the overall demand for goods and services to increase more rapidly than the economy's production capacity. This increases demand and leads to price rises.
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Ban on the export of wheat was held int he may. The war between the two countries, Russia and Ukraine has led to increase in demand for wheat flour, which was basically the reason of the ban. This cut in the export caused an increase in the demand for wheat overseas. The reason on the ban is also to ensure food security of the country. Due to the heat waves in the northern states of Panjab and Haryana, there is a decline in the wheat production. The Cabinet Committee on Economic Affairs (CCEA) declared the ban on export of maida and semolina, after that.
In recent news, one occasionally comes across the ban that the Government of India imposed on the export of wheat, flour, maida, and few other commodities, to help curb the rising costs of these commodities. One then wonders, why the prices for these items have risen and how this ban will help combat the issue. In order to understand the whole situation, one must observe the global events. Russia and Ukraine were the largest exporters of wheat and other items, and earlier this year Russia invaded Ukraine, this resulted in a halt of production and exports in Ukraine, additionally Russia too stopped exports while facing extreme trade sanctions. This resulted in a global shortage of these commodities, causing an unprecedented increase in their costs. India being a large exporter of these goods was also approached by several nations, and due to this, the domestic price also saw an increase as foreign nations offered more to the sellers, moreover, unfavourable natural conditions resulted in a lower output, and with an ever growing population, the demand for wheat wasn’t able to be matched by the producers, as a result the prices rose even more. On noticing this threat on the nation’s food security, the government has imposed a ban on the export of these commodities, until the domestic needs are met, this was also done to ensure that their costs remain controlled, and accessible by the general public.
The Indian government has banned wheat flour exports with immediate effect in order to address a slew of issues ranging from lower-than- expected production to soaring inflation mainly arising out of the Russia- Ukraine war.
The export ban has been triggered by factors such as fears of a six - years low production of wheat this year, since 2016 when the output was 92.29 mt, amidst high demand for exports in view of the Russia-Ukraine war and a sharp drop in procurement for buffer stocks by the Food Corporation of India (FCI).
The Main reason for wheat ban:
The Ukraine war is seen as primary reason for not just the rise in wheat prices but also other commodities such as maize, oilseeds and edible oils.Russia and Ukraine supply nearly 60 mt Or 30 per cent of wheat to the global market, while Ukraine is a crucial source of maize and sunflower oil supplies.
• Traders and analysts say the ban could be "temporary" and the Center could allow shipments once it gets a proper assessment of the wheat situation in the country. According to official sources said the Center will consider wheat on a government-to- government basis.
• The government order curbing wheat exports also said the move was "to manage the country's overall food security and support the needs of neighbouring and vulnerable countries".
If we see the reason of high prices there are many.
High price is caused many factors.
Gov. Ban the export of maida wheat flour because
1) that country is unable to full fill their own demand of wheat flour etc
2) In todays time , due russian ukraine war there is a shortage of wheat supply due to major producer of wheat for europe is russia -ukraine. This another reason
Because if there is too much increase of wheat export from one country that country would unable too full fill their own demand
3) Another reason for higher prices in domestic market is higher demand and lesser production
4) natural calamity such as flood , drought , earth quake etc
Factors that can reduce the higher prices are
1) Gov should make some effective policy to curb higher prices .
2) Gov should assure some guarnte to affected farmer of wheat , semolina for the next year good harves
India banned wheat export on May 13 with immediate effect of Russia ukrain war to cantrol rising price and as heatwave across the country affects the domestic output of wheat .india not deal with huge amount of wheat export in global market .india account less than 1% wheat export in global market .Indian commerce ministry Piyush Goyal said at the economic forum annual meeting 2022 india export less than 1 %of wheat in global market it will not effect the global market.
According to the government source , india ranked 19 in 2020 of wheat export.india is the second largest Producer of wheat and biggest consumer of wheat .
Reason behind wheat ban :there are two main reason behind wheat ban (1) rising price of wheat because of ongoing war between Russia and Ukraine , these countries are the largest producer of wheat and most of the country are dependent on them ,it will lead to the shortage of wheat in global market .
Second 2 reasons : ban was also prompted because the wheat production is decreased due to heatwave .
After banning wheat exports in May, the government on Saturday prohibited exports of wheat flour, maida, semolina, and whole meal aata with a view to curb rising prices. Notifying a decision of the Union Cabinet. The Directorate General of Foreign Trade (DGFT), however, said that exports of these items would be allowed subject to permission of the government of India in certain cases. The decision was taken at a meeting of the Cabinet Committee on Economic Affairs (CCEA).“The Cabinet Committee on Economic Affairs…has approved the proposal for amendment of a policy of exemption for wheat or meslin flour from export restrictions/ban,” an official statement has said. Russia and Ukraine are the major exporters of wheat. Accounting for around one-fourth of the global wheat trade. The war between the two countries has led to global wheat supply chain disruptions. Thus, increasing the demand for Indian wheat.As a result, the price of wheat in the domestic market has shown an increase. In order to ensure the food security of the country, the government put a prohibition the export of wheat in May. However, this caused a jump in overseas demand for wheat flour. Earlier, there was a policy not to prohibit or put any restriction on the export of wheat flour and therefore. A partial modification of the policy was required by withdrawing the exemption from ban/restrictions on export in order to ensure food security. And put a check on mounting prices of wheat flour in the country.
Wheat was banned from export this May. The reason was the ongoing war between Russia and Ukraine. Russia and Ukraine are the major exporters of wheat. Due to the war, now Indian wheat saw an increase in its demand. A price rise of the commodity was seen in India. A decrease in wheat production was also seen due to heatwaves in Punjab and Haryana. To ensure food security in India, the govt had to imply a ban on wheat export. Last week, the govt decided to ban the export of wheat flour, maida and semolina as well to restrain the increasing prices. The decision was made in a meeting of the CCEA.
There has been a tremendous increase in the population of India. This has increased the numbers of mouth to feed, needs to fulfill and requirements of jobs. But since the resources increase a slower pace while the population in multiplying, there is an increase in price