- AgriForce (NASDAQ:AGRI) is up 40% today as the price of wheat skyrockets
- India recently announced it will restrict its wheat exports
- Wheat futures are up more than 60% year-to-date, previously impacted by Russia’s invasion of Ukraine
Canadian agricultural company AgriForce (NASDAQ:AGRI) is up nearly 40% after India announced ceasing exportations of wheat. AGRI stock is receiving newfound attention on Wall Street today as the price of wheat skyrockets internationally.
In an amendment to its Export Policy of Wheat, dated Friday, May 13, the Indian Ministry of Commerce and Industry prohibited the export of wheat, citing domestic food security concerns.
On Sunday, India’s Commerce Secretary B.V.R. Subrahmanyam informed reporters that the country’s wheat production has dropped substantially as a result of crippling heat waves in the country. India’s wheat production this year is down about three million tons as wheat prices in India continue to soar upwards of 40%.
“The current rise in prices seems to be a panic reaction rather than a reaction based on a genuine collapse in supply or a sudden shooting of demand,” Subrahmanyam said.
While the nation did stipulate it would make some exceptions for individual governments whose food supply is vulnerable, it’s a far cry from the country’s previous aspirations on the matter.
This year India had set a goal to export 10 million tons of grain. This was in an effort to help assuage global supply chain slowdowns stemming from Russia’s invasion of Ukraine. Despite the country’s once lofty exportation goals, domestic concerns mean the country has had to backtrack on its intentions to “feed the world.”
Indeed, just this month, Prime Minister Narendra Modi stated his desire to “save the world from hunger.”
AGRI Stock Soars on India’s Wheat Export Ban
AgriForce is one of the clearest beneficiaries of the global supply hiccups affecting the world economy. AGRI saw its share price more than triple in May as news of Russia’s invasion of Ukraine broke. While the stock has eased back down slightly, India’s latest announcement may prove the company’s latest major catalyst.
India is the world’s second-largest wheat producer, with Ukraine and Russia not far behind. Unfortunately for the global wheat market, the South Asian nation consumes most of the wheat it produces. Last year, the country consumed 90 million tons of the total 109 million tons produced.
Wheat futures are up nearly 80% year to date, alongside an ever-growing list of commodities impacted by the conflict in Ukraine. A number of agricultural companies are seeing massive surges in share price as a result of continued food security concerns.
On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.