News

Commodity export restrictions could snowball

The global wheat market is continuing to get tighter after India announced over the weekend it is limiting wheat exports.

Ag economist Ben Brown with the University of Missouri’s Food and Agricultural Policy Research Institute tells Brownfield protectionist policies blocking commodity exports are snowballing.

“It’s an exacerbating wheel,” he said. “When one country puts protectionist policies on it, it sends the price in all the other countries up, especially those exporting countries up. And it causes other [countries] to consider protectionist policies as well.”

While India is the latest country to institute a commodity export ban, following Indonesia’s recent palm oil export ban, Brown said it’s a loose ban.

“They’re still going to allow exports to countries that have a tender in place or a contract, which largely would be Egypt along with a couple of other countries,” he said.

But he said India’s wheat export ban is a significant water mark for global calories under an export ban, quota or tax.

“That percentage of worldwide calories grew to the highest percentage that we’ve seen in the last two decades basically, exceeding the food crisis that we saw back in 2008,” Brown said. “So, a big kind of threshold that it broke through over the weekend.”

Brown made his comments on Brownfield’s recent Weekly Commodity Market Update.

Add Comment

Your email address will not be published.


 

Stay Up to Date

Subscribe for our newsletter today and receive relevant news straight to your inbox!