India bans wheat exports to G7

India's government said it would allow exports backed by letters of credit that have already been issued, and to countries that request supplies to meet their food security needs. G 7 is an organisation of the world's seven largest so-called advanced economies, which dominate global trade and the international financial system. With droughts and floods threatening crops in other major producers, commodity traders were expecting supplies from India to make up for part of the shortfall.

A week ago, senior officials from India's commerce ministry told me that they were bullish about increasing the country's wheat exports to meet the surge in global demand. The ban does not seem like a major policy U-turn, but they echoed Prime Minister Narendra Modi's statement that India was ready to feed the world. It also hints at the government's concerns over rising prices at home. One expert described the decision as a foreign policy challenge for India.

Delhi had been making noises in order to get a waiver from the World Trade Organization rule that makes it hard for countries to export grains that are bought at a fixed price from farmers for official reserves. Some countries seemed willing to help India find a way to export wheat to the world.

The conflict cut off supplies from the world's biggest exporter of sunflower oil - Ukraine, which means the costs of alternatives have also gone up. The country is also a major producer of cereals such as maize and wheat, which have risen sharply in price too.