Strategy Note /

Food protectionism and inflation: India's wheat export ban the latest example

  • India was aiming to export 15mn tons (7% of global exports) before heatwave hurt crop yield; USDA forecasts 8mt exports

  • Historically most of India's exports were to Bangla, Nepal, Afghan, Sri Lanka, UAE but it was recently approved by Egypt

  • Another example of food protectionism after Indonesia palm oil and China fertiliser export bans; more food price pain

Food protectionism and inflation: India's wheat export ban the latest example
Hasnain Malik
Hasnain Malik

Strategy & Head of Equity Research

Tellimer Research
16 May 2022
Published byTellimer Research

India's wheat export ban, announced on 13 May, impacts up to 4% of global exports, on USDA forecasts for 2022-23 (March year end).

The combination of the heatwave, which will hurt crop yields, and another higher than expected inflation print, have likely driven this decision.

This is another significant instance of food protectionism, following Indonesia's ban on palm oil exports (c50% of global exports) and China's ban on phosphate fertilizer exports (c20% of global exports).

Export restrictions likely push global food prices even higher: which means more pain for poor, net food-importing countries. eg Bangladesh, Pakistan and Philippines in Asia, Jordan and Lebanon in Middle East, and Egypt and Nigeria in Africa.

Wheat spot price up 80% yoy, 20% off Russia-Ukraine peak

India's wheat exports

India was aiming to increase its wheat exports over this period to 10-15mn tons (5-7% of global exports), according to comments from Food and Commerce minister Goyal in April 2022.

India is about 4% of forecast global wheat exports

Most of India's historic wheat exports are to Bangladesh, according to India DGCIS data for 2021.

Bangladesh buys more than half of India's wheat exports

Out of the top 10 largest importers globally, Bangladesh is India's only significant customer – it sells to Indonesia and others but only in small volumes.

In mid-April, Egypt, which accounts for over 5% of global imports, approved India as a wheat supplier.

Bangladesh is India's only high volume buyer among top 10