UAE to suspend exports of Indian wheat for four months
What's the story
The United Arab Emirates (UAE) ordered the temporary suspension of exports and re-exports of wheat and wheat flour originating from India, state news agency WAM said on Wednesday. Citing international developments, UAE's economy ministry said that the suspension would be in place for four months. Notably, India had announced a ban on wheat exports amid a global spike in the price of the commodity.
Context
Why does this story matter?
Global food prices hit a record high in March after Russia's invasion of Ukraine in February, according to the United Nations. Ukraine's wheat exports plunged and global wheat prices have jumped over 40% since. Commodity traders were expecting supplies from India to make up for the other producers' shortfall due to droughts and floods threatening other crops. Therefore, India's decision had upset many nations.
Approval
Companies have to apply at the ministry before exporting wheat
The UAE government's statement added that companies who wish to export or re-export Indian wheat brought into the UAE before May 13, would have to first make an application to the economy ministry. Notably, the UAE and India signed the Comprehensive Economic Partnership Agreement in February this year. India also approved the export of wheat to the UAE for domestic consumption.
Diplomatic channels
UAE among five nations who had asked for wheat
After India banned wheat exports in May, the UAE, Indonesia, Oman, Bangladesh, and Yemen had asked for Indian wheat via diplomatic channels. The UAE's wheat imports were hit after its Russian imports got disrupted because of the war. India's decision to ban wheat exports was met with criticism from many western nations as it was reportedly adding to the global food crisis.
Bullish
Major policy U-turn on India's part
India's Commerce Ministry officials reportedly had said in May they were positive about increasing the country's wheat exports and that "India was ready to feed the world." Therefore, the ban actually seemed like a policy U-turn hinting at the government's concerns over rising domestic prices. Before the export prohibition, India had aimed to ship a record 10 million tonnes of wheat this year.