Wheat prices hit world record after India export ban

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International wheat prices rose on Monday days after India banned the export of the crop. The price jumped to 435 euros ($453) a tonne when the European market opened.

U.S. and European wheat futures rose nearly 6%, with the Chicago market, the global benchmark, reaching its daily trading limit earlier and prices in Paris approaching record highs.

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At the end of their overnight trading session, Chicago futures were up 4.9%, off a previous two-month high.

On Saturday, India, the world’s second-largest wheat producer, said it would ban exports as a heat wave battered the country’s wheat crops and pushed domestic prices to a record high.

The rise in price also comes as world agricultural markets are under severe pressure due to the invasion of Ukraine by Russia, which is one of the main producers of wheat.

The ban has trapped around 1.8 million tonnes of grain in Indian ports, leaving traders facing heavy losses if they sell into a weaker domestic market, according to reports.

Wheat has contributed to this year’s record highs for global food prices, as measured by the UN food agency, with Russia’s invasion of Ukraine disrupting the market by halting massive shipments from Ukrainian seaports.

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Facing spikes in food inflation, other nations have also sought to preserve domestic supplies, with Indonesia banning palm oil exports in late April.

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India’s export ban comes as severe weather, including drought in parts of the United States and France, threatens production potential in other major exporting countries.

(With agency supplies)


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