NEW DELHI (FT) – The price of wheat has jumped on international markets after India banned the export of the staple cereal.
The benchmark wheat index rose as much as 5.9% in Chicago, the highest it has been in two months.
The export ban comes after a heatwave hit India’s wheat crops, taking domestic prices to a record high.
The cost of everything from bread and cakes to noodles and pasta has risen in recent months as wheat prices soared on world commodity markets.
India’s government said it would still allow exports backed by letters of credit that have already been issued, and to countries that request supplies “to meet their food security needs”.
Government officials also said the ban was not permanent and could be revised.
However, the decision has been criticized by agriculture ministers from the Group of Seven (G7) nations meeting in Germany.
“If everyone starts to impose export restrictions or to close markets, that would worsen the crisis,” German food and agriculture minister Cem Ozdemir said.
The G7 is an organization of the world’s seven largest so-called “advanced” economies, which dominate global trade and the international financial system. They are Canada, France, Germany, Italy, Japan, the UK and the United States.