Global wheat supply chain disruption: The price of wheat has jumped on international markets after India banned the export of the staple cereal following a heatwave that ravaged the country’s wheat crops. The ban effectively puts a damper on Kenya’s decision on whether to lift the ban on wheat imports from India to bridge the local supply deficit or not.
Kenya usually imports over 60 percent of the wheat supply from Russia and Ukraine combined and currently is facing a shortage with the current national annual wheat consumption at 24 million bags against an annual production of about two million.
According to the latest Economic Survey 2022, wheat production decreased by 39.4 percent from 405,000 thousand tonnes in 2020 to 245,300 thousand tonnes in 2021. As a result, the amount of wheat imported increased by 6.4 thousand tonnes to 1.89 million tonnes in 2020.
The Russia – Ukraine war has exacerbated the crisis as global prices of wheat have continued to increase due to the lack of supply to Sh67,000 per ton of the wheat being offered in the world market up from an average of Sh32,000 per tonne. To try and maintain local supply chains, Kenya Plant Health Inspectorate Service (KEPHIS) was to send a Kenyan delegation to India to assess the pest control initiative in the Asian country.
Kenyans to brace as prices of maize flour set to rise
Kenya had banned wheat imports from India due to the fungus Tilletia Indica or Karnal Bunt. And now the global supply disruption was forcing the government to review its stand on the viability of wheat imports from the Asian market, whose prices were favorable trading at 50-80 dollars an estimate of Sh 5,805-9,288 per tonne.
In 2020 alone Kenya imported wheat worth 97 billion shillings due to high international wheat prices propped up by the Russia-Ukraine conflict.
India has in the past not been a major exporter of wheat opting to consume its produce locally but the war between Russia-Ukraine has thrown it right in the middle.
The ban is however not permanent with India’s government saying 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”. The decision has elicited criticism from agriculture ministers from the Group of Seven nations meeting in Germany.
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. Before the ban, India had aimed to ship a record 10 million tonnes of wheat this year. This means that the price of wheat flour in the country is likely to increase amid increased demand for the commodity  against an already strained supply chain.