India’s wheat export ban: Bad economics, good politics, modest impact

Inde | Les actualités économiques et financières

The Indian government’s May 14 ban on wheat exports has roiled markets and been widely assailed as potentially aggravating near record-high wheat prices and shortages caused by Russia’s war in Ukraine. But in the absolute sense, the impact on traded volumes will be relatively minor, and markets—which spiked once trading resumed following the weekend when the ban was imposed—have calmed, even as prices remain high because of war, persistent supply chain issues, and higher fertilizer and shipment costs.

The export restrictions reflect Prime Minister Narendra Modi’s government’s domestic and international political incentives. Internationally, the ban’s significant caveats—exempting countries at its discretion and allowing exporters to meet existing commitments—position the Modi government to claim credit for helping partner countries weather the crisis and expand its influence in the Middle East.

During price crises—especially unexpected crises brought on by less anticipated non-weather-related factors, including export restrictions in major exporting countries—food-exporting countries restrict their exports to ensure adequate domestic supplies and curb inflation, thereby shielding their consumers (and voters) from price increases. To some extent, these policies are successful, both in terms of reducing prices (India’s domestic wheat price dropped 10 to 15 percent on the news) and shoring up political support.

As a result, India’s move has been unpopular with farmers who have been cut off from continuing to benefit from record-high prices but welcomed as a check on food price inflation, especially by urban consumers.

Laisser un commentaire

Votre adresse e-mail ne sera pas publiée. Les champs obligatoires sont indiqués avec *

Actifs privés, attrait public – ces investissements résisteront-ils à la remontée des taux ?
La Zone Euro ne va pas si mal, par rapport aux autres
Plus de publications

Publier sur la Fibee Academy*

Pour publier sur la Fibee Academy, rien de plus simple, envoies nous un email avec :

  • Ton nom
  • Ton cursus actuel
  • Ton LinkedIn
  • Ta publication

A réception nous vérifierons que ta publication colle avec notre charte éditoriale et nous te faisons un retour rapide. Si celle-ci est acceptée nous te créons ta fiche auteur sur Fibee et nous nous chargeons de sa publication. 

* service réservés aux étudiants

On ne va pas se quitter comme ça...

Abonnez-vous à notre page LinkedIn.