by Enrico Dela Cruz and Gus Trompiz
May 16 (Reuters) – Wheat prices jumped nearly 6% on Monday after India’s announcement of an export ban, stoking fears of an escalation in already high global market tensions since Russia invaded Ukraine.
The Indian embargo, justified by the current heat wave, which should reduce national production and is already driving up prices on the local market, probably signals the end of hopes of record exports from New Delhi, which could have compensated for the expected drop in Ukrainian wheat supply.
At the same time, in France as in the United States, several major producing regions are suffering from drought, which is compromising production forecasts.
“The situation is complicated on the international scene with India’s decision on Saturday to put in place export restrictions”, summarizes the specialized consulting firm Agritel.
The most-traded wheat futures contract on the Chicago Board of Trade (CBOT) market gained early in the day as much as 70 cents, the biggest allowed rise in one session, nearly 6%, at 12, $47 a bushel, its highest level since March 9. It still took 4.2% at 11:10 GMT to 12.27 dollars.
The Euronext September contract, a reference for the European market, which last week approached its March record, took its side 4.0% to 433.25 euros per tonne. It rose to 439.75, not far from the historic record of 450 euros recorded in early March.
Rumors of an Indian export ban had been circulating in recent days due to the continued heat wave, with many traders and analysts estimating India’s wheat crop to fall below 100 million tonnes.
The government had already reduced its harvest forecast to 105 million tonnes earlier this month.
For its part, the American Department of Agriculture announced last week that world stocks should fall over the period 2022-2023 to their lowest level in six years. (Report Enrico Dela Cruz and Gus Trompiz, French version Marc Angrand, edited by Matthieu Protard)