Following India's tightening of its grain export ban, Argentina is also considering tightening its wheat export controls, which will undoubtedly worsen the global food crisis at a time when global food supplies remain in dire straits.
According to the media, citing sources familiar with the matter, Argentina is considering tightening restrictions on wheat exports as crops harvested at the end of the year wither due to drought and food inflation is spiraling upward.
Argentina is a top seven global wheat supplier and its biggest customer is neighboring Brazil. Previously, Argentina had a wheat export quota of 10 million tons for 2022-2023.
Further restrictions on Argentine wheat will exacerbate global wheat supply constraints, with U.S. wheat exports currently at their lowest level in 50 years and the Russia-Ukraine conflict still hampering shipments.
Argentina's damaged wheat crop expected to tighten exports
The drought and frost season appear to be forcing the Argentine government to take action in an effort to protect local consumers from soaring prices on the one hand, and the need to replenish hard currency reserves on the other.
The government has held meetings with Argentine wheat exporters as domestic millers worry about a shortage of wheat supplies, according to media sources citing people familiar with the matter. Argentine crop export group Ciara-Cec also confirmed that the government has held a meeting to dispel the concerns of its domestic millers.
In addition, Argentine authorities are discussing ways to limit exports while easing demand from international buyers.
Previously wheat traders have registered the export of 8.8 million tons of wheat on the official crop export register, and the Argentine authorities are now considering delaying the shipment of this wheat. Another measure considered by the government of Argentina is to prohibit wheat traders from registering exports of more than 9 million tons until the extent of harvest losses is fully understood.
India's rice ban could trigger further increases in global food prices
According to media reports, the Indian government recently said that this year, India's rice production may be reduced by 10 million to 12 million tons, for domestic food security considerations, the Indian government tightened grain exports. Indian official data show that this year, India's domestic crushed rice prices once soared 38%, the export volume also went all the way up. From April to August this year, compared with the same period in 2019, India's crushed rice exports grew 4178%.
But this year's heavy rains, which damaged key crops such as rice sown in India during the summer, could exacerbate inflation in India, with higher food prices in turn prompting New Delhi to impose more restrictions on exports of rice, wheat and other grains.
According to the Global Times, Wang Yongzhong, director of the International Commodity Research Unit at the Institute of World Economics and Politics/National Institute of Global Strategy Think Tank of the Chinese Academy of Social Sciences, said three factors - fertilizer prices, weather and geopolitics - led India to introduce the rice ban. Compared to wheat, corn and soybean prices, which often fluctuate, Indian rice prices have been relatively stable. However, since this year, global fertilizer prices are at an all-time high, raising the cost of rice cultivation. Especially since the Russia-Ukraine conflict, exports from Russia and Belarus, the two major exporters of potash, have been blocked, leading to a continuous rise in fertilizer prices.
The media said the international price of rice is rising amid supply chain disruptions caused by the epidemic and the Russia-Ukraine situation, but India is placing more emphasis on domestic supply. India has previously restricted the export of wheat and sugar, global food prices may face new upward pressure.
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