Grain prices surged when Russian forces blockaded Ukraine’s Black Sea ports, halting shipments from one of the world’s largest grain exporters. Many countries reacted by curbing their own food and fertilizer exports to protect domestic supplies. Such measures proved counterproductive, driving prices higher, particularly hurting low-income countries that rely on food imports.

One year after Russia’s invasion of Ukraine, many of those export-limiting measures have lapsed, and high prices mostly reflect broad global inflation, but the number of restrictions remaining in place is still troubling; 101 export restrictions—including quotas, licenses, and outright bans—are still being enforced, contrary to World Trade Organization principles that the limits should be temporary. It has been estimated that those restrictions covered more than 11 percent of global food trade in 2022, with export bans alone responsible for 3.8 percent. Although countries with a small share of food exports account for most of the remaining restrictions, even those are causing price distortions and should be lifted.

Bans that Russia and other exporters imposed on wheat in the first half of 2022, for example, covered 34.5 percent of international shipments and were responsible for approximately one-quarter of the subsequent 52.7 percent increase in wheat prices. Bans on corn exports covered 5.2 percent of shipments and accounted for more than three-quarters of the 16.7 percent increase in corn prices. Since the middle of last year, the outlook for food price inflation has improved thanks to the signing of the Black Sea Grain Initiative, removal of some restrictions, good summer harvests, and an increase in shipments by Australia and the European Union. The U.S. Department of Agriculture predicts a 5 percent increase in world food trade in the 12 months ending June 30, 2023.

Nevertheless, further restrictive measures could alarm commodity markets and increase prices again. The U.S. Department of Agriculture also predicts a 4.5 percent contraction in rice shipments because a decrease in exports from Pakistan, Thailand, the United States, and Vietnam should more than offset an increase from India. India announced a ban in September 2022 on broken rice and imposed a 20 percent duty on exports of other grades of rice to boost local supplies. India’s ban covers 5 percent of global rice exports and is expected to increase prices by 2 percent and bans from other exporters could raise prices by another 2.3 percent. Additional restrictions by India could raise international rice prices by 4.3 to 12.1 percent. 

A multiplier effect increasing rice prices by as much as 20 percent could result if other exporters such as Thailand and Vietnam also institute bans. Likewise, a ban by one of the top three exporters of corn and wheat could increase prices by up to 44 and 8 percent, respectively.

Such scenarios can be avoided if exporters refrain from stockpiling goods and banning, taxing, or otherwise restricting exports. If deemed necessary, emergency restrictions should be targeted, transparent, and temporary. Food importers can also permanently reduce or eliminate import tariffs and other taxes to ensure adequate supply, and to reduce uncertainty and the risk of escalating countermeasures, international organizations can better cooperate to provide real-time updates on trade policy changes and their implications for world production and trade.