Les cours du blé s’envolent sur le marché européen après l’interdiction de l’Inde d’exporter

Les cours du blé s’envolent sur le marché européen après l’interdiction de l’Inde d’exporter

It’s a brutal about-face. Narendra Modi decided to ban the export of wheat, Saturday May 14, with immediate effect. Ten days earlier, the Indian Prime Minister, on a tour of Europe, had assured his Western counterparts that India would “feed the world”. “Whenever humanity faces a crisis, India finds a solution”, had claimed Modi in front of the Indian diaspora in Copenhagen. The Indian government announced in the process that it was sending trade delegations to a number of countries, Morocco, Tunisia, Indonesia, Turkey, to explore the possibilities of exporting wheat.

The consequences of the Indian Prime Minister’s decision were immediate: prices soared on the European market on Monday, May 16. The price of wheat reached 438.25 euros per tonne at the close, a record. The global market had already been significantly disrupted by the Russian invasion of Ukraine, with the two countries accounting for almost a third of global exports. Wheat prices have increased by more than 40% since the beginning of the year.

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The government of Narendra Modi had a hard time adjusting its communication to justify this reversal which provoked the ire of the members of the G7. Officially, India justifies its change of policy by its desire to control consumer price inflation on its own territory, which reached 7.79% in April, its highest level for eight years, due to the rise food and fuel prices. Indian Commerce Secretary BVR Subrahmanyam, who is tasked with explaining the government’s change of footing to the media, said regions have seen the price of wheat and flour rise by 20% to 40% in recent weeks.

Speculative transactions

The government hopes to curb the speculative operations of wheat traders. This decision comes, in fact, in a context of declining national cereal stocks built up by the government each year to ensure food security and its public distribution system. Every month, 700 million poor people receive free or subsidized essentials. But this year, farmers have preferred to sell to private traders who offer better prices than the minimum price guaranteed by the government. Wheat prices in India reached in some markets 25,000 rupees (308 euros) per tonne, well above the minimum support price at 20,150 rupees.

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