But the alarm its export ban caused underscores the fragility of global food supplies.
How did we get here?
Ukraine is among the top five global exporters for a variety of key agricultural products, including corn, wheat and barley, according to the US Department of Agriculture. It’s also the leading exporter of both sunflower oil and meal.
But the food situation was strained even before the fighting started in Europe. Snarled supply chains and unpredictable weather patterns — often the result of climate change — had already pushed food prices to their highest level in about a decade. Affordability was also an issue after the pandemic left millions out of work.
After Modi’s promise, many vulnerable countries were banking on supplies from India.
“Indian wheat exports are especially important this year on the back of Russia-Ukraine crisis,” Oscar Tjakra, senior grains and oilseeds analyst at Rabobank, told CNN Business.
The “ban will reduce the availability of global wheat for exports in 2022 and will provide support to global wheat prices,” he added.
On Monday, Ambassador Linda Thomas-Greenfield, the US Representative to the United Nations, said that she hoped Indian authorities “would reconsider that position.”
Rising food protectionism
The government also said that restrictions do not apply “in cases where prior commitments have been made by private traders,” and to countries that request supplies “to meet their food security needs.”
According to Tjakra, these exceptions should be considered “good news,” but they do make it harder to assess the impact the prohibition will have on global trade.
The “severity of impact” of the ban “will still depend on volumes of India wheat exports that are still allowed at the government level and volumes of wheat production from other global wheat producers,” he added.
Some analysts in India say that allowing unrestricted exports was a bad idea in the first place.
“We don’t know what will happen to the climate in India,” Devinder Sharma, an India-based agriculture policy expert, told CNN Business.
India is among the countries expected to be worst affected by the impacts of the climate crisis, according to the UN’s climate change authority, the Intergovernmental Panel on Climate Change (IPCC).
If crops are ruined because of unpredictable weather, India could run short of food, and be left “standing with a begging bowl,” Sharma added.
India is not the only country looking inward and putting curbs on agricultural exports.
“With inflation already on the rise in Asia, risks are skewed towards more food protectionism, but these measures could end up exacerbating food price pressures globally,” Nomura analyst Sonal Varma said in a note on Saturday.
She added that the impact of India’s wheat export ban will “be felt disproportionately by low income developing countries.”
Bangladesh is India’s top wheat export destination, followed by Sri Lanka, the United Arab Emirates, Indonesia, Yemen, the Philippines and Nepal, Nomura said.