Wheat prices rise after India curbs most exports

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 Wheat prices rise after India curbs most exports

Wheat futures climbed by the daily limit on Monday after India plans to limit most of its exports of the commodity, as the fallout from the Ukraine war continues to reverberate.

Soft red winter wheat for July delivery W 00, rose by 62 cents, the normal daily price limit, to lock at $12.39 a bushel, a gain of 5.27%. The contract hit a new high of $12.47 a bushel, its highest level since mid-March.

India has imposed a ban on wheat exports, causing a spike in global prices to threaten the security of the vital commodity to itself and other neighboring and vulnerable countries. The price of Chicago wheat futures has climbed 60% this year, after Russia has invaded Ukraine in February.

Russia and Ukraine are responsible for 25 percent of global wheat exports, with 13% of corn exports coming from Ukraine alone, according to RBC Capital Markets analysts. Russia's invasion of its neighbour has resulted in shortages of wheat and surging prices for bread and other staples.

India s Commerce Secretary B.V. R. Subrahmanyam told reporters that the country s wheat production has dropped by three million tons from 106 million tons last year. In India, prices have gone up 20 -- 40%.

India said on Sunday that it would continue to export to needy nations - the country mainly provides wheat to Bangladesh, Nepal and Sri Lanka. India consumed most of what it produces, exporting 7 million tons of wheat last year out of 109 million tons produced, said Subrahmanyam.

India is not a big wheat exporter, but the fact that a big country is trying to secure food supplies left the market anxious with wheat prices going up around 5% this morning, according to analysts at Danske Bank.

Corn prices have climbed 34% this year, as well as a 34% increase in the value of other commodities.

Ukraine's Ministry of Agriculture said earlier this month that 30% of the country's farmland was either occupied or unsafe, with mines planted and farmland destroyed. Ukraine grain has been stuck in silos with Russian ships blocking main export routes along the Black Sea.

The U.S. Department of Agriculture issued its first world estimates for the 2022 -- 23 crop season last week, forecasting a decline in wheat production for both this year and next year.