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India Announces “Some Relaxation in Wheat Export Notification,” as U.N. Seeks to Ease Ukraine Grain Blockade

Reuters writers Rajendra Jadhav and Mayank Bhardwaj reported today that, “India will allow overseas wheat shipments awaiting customs clearance, the government said on Tuesday, introducing some relaxation in exports after it banned overseas sales of the staple on Saturday.

India will also allow wheat exports to Egypt, the government said in a statement.

“‘It has been decided that wherever wheat consignments have been handed over to Customs for examination and have been registered into their (Customs) systems,’ either on May 13, 2022, or earlier, would be allowed to be shipped out, the government said.”

The Reuters article added that, “Of the approximately 2.2 million tonnes of wheat at ports or in transit, traders said they have LCs for only 400,000 tonnes.

“The decision to ban wheat exports also trapped some 1.8 million tonnes of grain at ports, leaving traders facing heavy losses from the prospect of selling onto a weaker domestic market.”

And Bloomberg writers Shruti Srivastava and Pratik Parija reported today that, “India is allowing ‘some relaxation‘ of its order restricting wheat exports to allow traders to meet prior commitments, according to the trade ministry. Futures fell as much as 3.8% in Chicago before paring losses.”

Reuters writer Leah Douglas reported yesterday that, “U.S. Agriculture Secretary Tom Vilsack said on Monday he has ‘deep concern‘ about India’s wheat export ban, which spurred a rally in already elevated wheat prices.

“‘What we need is transparency in the market, what we need is a market that is helping to get goods to those who are in need,’ Vilsack said on a call with journalists.”

Meanwhile, Reuters writer P.J. Huffstutter reported yesterday that, “Chicago wheat futures hit the daily 70-cent trading limit cap on Monday after India banned exports of the grain, an abrupt policy change that fanned concerns about global supplies strained by Russia’s invasion of Ukraine.”

“India’s embargo, prompted by a heat wave that has cut harvest prospects and sent domestic prices soaring, has hit hopes of record wheat shipments from the country in the coming year that would alleviate war-reduced supply from Ukraine. Drought in the southern U.S. Plains and parts of France are eroding production potential in other major exporting countries, too,” the Reuters article said.

Also yesterday, Bloomberg writer Wojciech Moskwa reported that, “US Treasury Secretary Janet Yellen said Russia’s invasion of Ukraine has created a global crisis by exacerbating food security issues for the whole world.

“‘The war is having an impact beyond Ukraine and it’s something that we’re very concerned about,’ she said in Warsaw on Monday. ‘I’m afraid we really have a global crisis on our hands.'”

“Yellen Says World Faces Food Crisis Because of War in Ukraine,” by Wojciech Moskwa. Bloomberg News (May 16, 2022).

The Bloomberg article noted that, “‘I’d like to recognize the efforts the Polish government and other neighboring governments are making to help Ukraine develop roots for its agricultural exports, for wheat, for commodities, that global markets desperately need and are very hard to export because of the blockades of Odesa and other ports,’ she added.”

And William Mauldin reported in today’s Wall Street Journal that,

United Nations Secretary-General António Guterres is pursuing a high-stakes deal with Russia, Turkey and other nations to open up Ukrainian food exports to world markets and stave off a potential global food shortage, according to diplomats familiar with the effort.

“Russia has sealed off Ukraine’s Black Sea ports to weaken the country and conquer its coast. Mr. Guterres has asked Moscow to permit some Ukrainian grain shipments in exchange for moves to ease Russian and Belarusian exports of potash fertilizer.

“Russia doesn’t currently appear to be engaged in earnest negotiations toward a deal, the diplomats said. Turkey, a major Black Sea power, has expressed willingness to participate in a deal, including by removing mines from the sea and managing shipping traffic, they said.”

Mr. Mauldin explained that, “Russia and Belarus are key suppliers of potash, a plant nutrient that can ensure good harvests in other regions of the world. Belarusian potash is currently banned from world markets under Western sanctions. The war in Ukraine also has disrupted some Russian exports, and Mr. Guterres is seeking to remove barriers—including Western sanctions—to get more Russian and Belarusian potash back on the market.”

Today’s Journal article stated that, “Mr. Guterres alluded to the negotiations on Wednesday in Vienna, saying, ‘We need to find a way to have the food production of Ukraine and the food and fertilizer production of Russia brought back to the global markets despite the war.’  Mr. Guterres visited Moscow, Kyiv and the Turkish capital of Ankara in April to discuss the war and the food-security issues, among other topics.

“The U.N.-led talks to open up Black Sea grain exports complement more-immediate efforts by European countries to move smaller amounts of Ukrainian food products to market through the Continent’s roads, railways and waterways, including the Danube River.”

Reuters writers Philip Blenkinsop and Mathieu Rosemain reported yesterday that, “The European Union and the United States agreed on Monday to closer cooperation to counter disrupted supply of commodities and food caused by Russia’s invasion of Ukraine and to combat disinformation from Moscow.”

The Reuters article indicated that, “‘It was also important to find alternative land routes to export Ukrainian grain, [EU trade chief Valdis Dombrovskis] said.”

And Reuters writer Pavel Polityuk reported today that, “Ukrainian national railway company Ukrzaliznytsia has imposed restrictions on corn transportation to the Danube port of Reni, APK-Inform agriculture consultancy said on Tuesday.

“It gave no reason for the decision, but it previously said that similar restrictions were imposed due to a large number of wagons accumulated near the crossing points.”

Keith Good Photo

Keith Good

Keith Good is the social media manager for the farmdoc project at the University of Illinois. He has previously worked for the USDA’s National Agricultural Statistics Service, and compiled the daily FarmPolicy.com News Summary from 2003-2015. He is a graduate of Purdue University (M.S.- Agricultural Economics), and Southern Illinois University School of Law.

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