May 24, 2022

The Indie Toaster

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Extreme heat in Asia will weigh down the pockets of Brazilians

Global shock of wheat market exports and prices will affect the price of bread, pasta, pizza and other wheat derivatives in Brazil | Rowena Rosa / Brazil Agency / EPC

India announced a ban on wheat exports just days after it said it would set a record this year. The announcement comes in the wake of a severe heat wave, which has reduced production and sent local prices to an all-time high amid strong export demand. The warning explains that rising global wheat prices are threatening the food security of India and neighboring and vulnerable countries as part of the war in Ukraine.

It said the government would allow the export of already issued letters of credit and at the request of countries trying to “meet their food security needs”. Prior to the ban, India aimed to export a record 10 million tonnes by 2022. Global buyers are betting on the world’s second-largest wheat producer, following a slump in exports from the Black Sea following Russia’s invasion of Ukraine.

Prior to the war, Ukraine and Russia accounted for about a third of world wheat and barley exports. After the Russian invasion, Ukrainian ports were blocked and civilian infrastructure and grain pits destroyed. The Indian embargo could push global prices to new heights and particularly affect poor consumers in Asia and Africa.

Rising food and energy prices pushed up India’s annual retail inflation to an eight-year low in April, reinforcing economists’ view that the central bank should raise interest rates more sharply to control prices. Wheat prices in India rose to record highs in some spot markets, reaching Rs 25,000 ($ 465) per tonne against the government-set minimum support price of Rs 20,150.

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G7 agriculture ministers said on Saturday that halting wheat exports from India would “exacerbate” the crisis in world grain supplies caused by the war in Ukraine. “If everyone starts restricting their exports or closing the markets, the crisis will get worse and it will affect India and its farmers,” German Minister Chem Ostmeier said after a meeting with his G7 colleagues in Stuttgart.

The heat wave under the drought broke the wheat crop

Despite being the second largest producer of wheat in the world, India consumes most of its wheat. It has set a target of exporting 10 million tonnes of grain by 2022-23, with the aim of exploiting global disruptions in wheat supply due to the war and finding new markets for wheat in Europe, Africa and Asia. Much would have gone to developing countries like Indonesia, the Philippines and Thailand.

But a prolonged and exceptional heat wave from mid-March will make the crop size smaller than expected. In April, India exported a record 1.4 million tonnes of wheat and had already signed agreements to export about 1.5 million tonnes in May. “India’s ban will push up global wheat prices. There is no big supplier in the market at the moment, ”said a market agent.

The more than one billion people in India and Pakistan, about 10% of the world’s population, face an unnatural extreme heat wave and punish one of the planet’s most populous regions with temperatures far above average. Temperatures in India have been high for weeks with continuous heat waves under dry and stagnant weather since the beginning of spring.

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The Indian Meteorological Department (IMD) said March’s maximum temperatures were the highest in nearly 1,250 years, with rainfall only a quarter to one-third above normal. The climatic conditions of the hottest weather lasted throughout the first half of April and May, exacerbating the drought.

“It’s like a fire burning all around,” said worker Shafi Mohammed, a villager on the outskirts of the Pakistani city of Jakobabad, where residents are struggling to find reliable access to safe drinking water. Across the country, the PMD has warned that temperatures will hover between 6 degrees Celsius and 9 degrees Celsius, with the capital Islamabad – and provincial centers Karachi, Lahore and Peshawar – hovering around 40 degrees Celsius. Friday.

The heat wave in South Asia will last an additional two months. Yesterday, the city of Jakobabad in Pakistan’s Sindh province reached a maximum of 50.0 degrees Celsius, according to the Pakistan Meteorological Department (PMD). This Saturday, Jakobabad returned to a high of 50ºC with a low of 51.0ºC, the highest level ever measured on the planet this year, higher than the 50.7ºC seen in Australia in the summer. In India, several cities reported monthly or full temperatures this Saturday, with Panda hovering around 48.8ºC.