Global Marketing

Wheat Surges Amid Fears of Shortages as India Restricts Exports

By: Bianca and Mimi

Wheat has recently jumped to a record high in terms of exchange rates, after India made the move to restrict exports due to a scorching heat wave. Managing price escalations can be difficult in international markets, especially when it comes to exports. While there was no significant drop in wheat output earlier this year, unregulated export prices led to an increase in local prices. India might not be one of the world’s top wheat producers, their ban could drive global prices to a whole new peak, considering an already tight supply. 

The ban has led to currency fluctuations, as wheat prices have risen to record highs, at up to #320 per tonne. Along with inflation, rising fuel, labor, transportation, and packaging costs have also increased the price of wheat flour in India. The company had a huge rise this year, after Russia’s invasion of Ukraine, exporting a record 7 million tonnes of wheat, a 250% increase from last year.

Studies on India’s price to market (PTM), demonstrate that “India’s exporters practice PTM by absorbing exchange rate changes into their mark-up in G3 markets, where they face tougher competition, but fully pass-through exchange rate changes in emerging markets.” (Mallik, 2012). Now that India is seeing less competition due to supply issues, they could potentially increase prices further after their ban is lifted, since wheat is currently very high in demand. 


Mallick, S., & Marques, H. (2012). Pricing to market with trade liberalization: The role of Market Heterogeneity and Product Differentiation in India’s Exports. Journal of International Money and Finance31(2), 310-336. Retrieved from

Parija, P. (2022, May 14). Retrieved May 16, 2022, from