After the onslaught of Covid, businesses and traders around the world expected 2022 to bode well in their favour. But that doesn’t seem to be the case. Covid already left its mark on the global supply chain which is still vexing international trade. Also, the crisis between Russia and Ukraine added to the problems. Moreover, this year, major agro-based countries around the world are facing adverse weather conditions. All of this has caused food and fuel prices to shoot up and this directly prompted both developed and developing economies to take steps to aid the situation.
Parts of Asia witnessed heatwaves and extremely low rainfall. This forced the producers to cut short their total cropping area which resulted in a significant downfall in the total crop production. Naturally, a lower output would lead to an increased price. Asian governments, in order to regulate the prices and to stabilise the domestic reserves curtailed the exports of major agro commodities. Asia accounts for 60 percent of total world population and majority of Asian countries face issues with food security.
The measures taken by Asian governments have significantly affected global trade. Since Asia is a crop extensive region, so a lot of countries around the world depend on it. Hence, any change in its trade policies reflects largely in the global market. Below is the summary of the commodities that are restricted or curbed for exports by Asian governments this year.
Palm Oil- By Indonesia (April 2022)
World’s top palm oil exporter, Indonesia imposed a three-week export ban on edible oil and related products between April 28 and May 23 to tame soaring local prices and improve domestic cooking oil supplies after the Ukraine conflict disrupted sunflower oil exports from Kyiv. Prior to the full ban in April, the government had already started to curb palm oil exports in January.
Jakarta lifted the ban but imposed conditional requirements for exporters. Industry experts had urged authorities to ease export restrictions and taxes, including removing the imposed conditions, as producers have been struggling with high inventories since the introduction of the export ban. Most recently, the government started waving palm oil export levies from mid July to Oct. 31 to help encourage exports and prop up prices of palm oil fruits for farmers.
Wheat- By India (May 2022)
Days after the government maintained a target volume of 10 million tonnes of Wheat Exports to compensate for Ukraine’s reduced supply, India banned the exports of wheat on 14th of May owing to the scorching heat wave that curtailed output and increased domestic prices of the
country. While the ban is still in place, the government has allowed some wheat shipments to avoid the damage of products still lying at ports by monsoon rains.
Sugar- By India (May 2022)
By capping sugar exports this season at 10 million tonnes,India for the first time in six years has imposed a restriction on exports of the commodity. A government order said, this has been done to prevent a surge in domestic prices after mills sold a record volume on the world market. However, the country is set to allow sugar exports in two tranches for the next season beginning in October. India has taken this step with an aim to balance the interests of its farmers and consumers, government and industry, officials told Reuters.
Chicken- By Malaysia (August 2022)
Malaysia halted exports of live chickens starting June 1 in an effort to stabilise output and domestic prices, after a global feed shortage triggered by the war in Ukraine disrupted production.
Rice- By India (September 2022)
With a view to augment supplies and calm local prices after below-average monsoon rainfall curtailed planting, India on September 8, banned Rice Exports of broken rice variety and imposed a 20% duty on exports of various grades of rice. This has halted rice loading at Indian ports and nearly one million tonnes of grain are trapped as buyers refuse to pay the government’s new 20% export levy on top of the agreed contract price.
To sum this up, different restrictions have been imposed by the governments of different Asian countries on specific commodities in 2022 so far primarily due to adverse weather conditions and disruptions in the global supply chain.