Last week, Indian Prime Minister Narendra Modi told US President Joe Biden that India was ready to export food following the shocking supply and price hikes as a result of the Ukraine war.
Mr Modi said India “has enough food” for its 1.4 billion people, and is “ready to supply food stocks from all over the world from tomorrow” if the World Trade Organization (WTO) approves.
India has high quality of wheat and other edible items ready to be exported in food scarced countries on affordable prices. Recently Egyptian experts quality checked Indian wheat in order to make an import deal and found it up to the mark to be imported in their country.
Property prices were already high 10 years before the war in Ukraine due to global harvest problems. They have jumped after the war and have been on the rise since 1990, according to the UN Food and Agricultural Organization (UNFAO) food price index.
Ukraine war ‘global food crisis’
Russia and Ukraine are two of the world’s leading wheat producers and account for about a third of the world’s annual wheat exports. Both countries also make up 55% of the sunflower oil exported annually, and 17% of corn and barley exports. In total, they are expected to export 14 tons of wheat and more than 16 million tons of maize this year, according to UNFAO.
“The disruption of the supply and threat of embargo facing Russia means that these exports must be excluded from the equation. India can intervene to export, especially if it has sufficient stock of wheat,” said Upali Galketi Aratchilage, from Rome. economist at UNFAO.
India is the second largest producer of rice and wheat in the world. As of early April, it had 74 million tons of two basic items in stock. In this regard, 21 million tons are reserved for its strategic location and the Public Distribution System (PDS), which provides more than 700 million poor people access affordable food.
India is also one of the world’s cheapest suppliers of wheat and rice: it already exports rice to about 150 countries and wheat in 68 countries. It exported about 7 million tons of wheat by 2020-2021. Traders, in response to rising demand in the international market, have already entered into contracts to export more than three million tons of wheat from April to July, according to officials. Export exports exceed a record $ 50bn in 2021-22.
India has the capacity to export 22 million tons of rice and 16 million tons of wheat this financial year, according to Ashok Gulati, professor of agriculture at the Indian Council for Research on International Economic Relations. “If the WTO allows government shares to be exported, it could be much higher. This will help cool global prices and reduce the burden on imports globally,” he said.
There is another booking. “We have enough stocks yet. But there are concerns, and we should not be gung-ho about feeding the world,” said Harish Damodaran, a senior partner at the Center for Policy Research, a think tank based in Delhi.
The poorest suffer from malnutrition during a shortage of fertilizers
First, there is the fear of lower yields than expected. India’s new wheat season is in full swing and officials are setting a record 111 million tons of harvest – the sixth consecutive harvest season.
But experts like Mr. Damodaran are unsure. He believes the yield will be much lower due to the lack of fertilizer and climate change – heavy rains and extreme heat in early summer. “We take production very seriously,” he said. “We will know in another 10 days.”
Another question, experts say, is over-fertilizing, which is part of farming. Indian stocks declined after the war – India imports ammonium phosphate and fertilizers containing nitrogen, phosphate, sulfur and potash. Russia and Belarus account for 40% of the world’s total potash exports. Globally, fertilizer prices are already high due to rising gas prices.
Lack of fertilizer can easily affect production at the next harvest. One way to deal with this, says Mr Damodaran, is that India has explored “fertilizer wheat agreements” with countries such as Egypt and Africa.
Also, if the war continues for too long, India may face challenges of eligibility in boosting exports. “Shipping of large grain grains involves major infrastructure such as transportation, storage, ships. And the capacity to start shipping at high prices,” said Mr. Aratchilage. There is also the question of higher cost of goods.
Finally, there is a growing concern about rising food prices at home – food inflation increased by 16 months at 7.68% in March. This is largely due to the increase in the prices of edible oils, vegetables, cereals, milk, meat and fish. India’s largest bank has warned of “rising global price pressures” leading to “high uncertainty” about inflation.
Russia’s attack could have “serious consequences” on world food security, according to IFPRI, a think tank. UNFAO estimates that long-term disruptions to the export of wheat, fertilizers and other commodities from Russia and Ukraine may increase the number of malnourished people in the world from eight million to 13 million.
If there is one thing Indian politicians know that food – or your lack – determines their fate: provincial governments and governments have collapsed in the past because of rising onion prices.
Despite countless hardship India has manages to maintain its internal food and economic management good enough to help global community.