India’s Wheat Stockpiles In Government Warehouses Fall After Poor Harvests

Wheat stockpiles in India’s government warehouses have fallen to their lowest level since 2008 after two consecutive years of lower production prompted record sales from state reserves to bolster domestic supplies and cool prices, official data showed on Tuesday.

As of May 1, wheat inventories held by the state Food Corporation of India (FCI) totalled 26 million metric tons, down 10.3 per cent from 29 million metric tons a year earlier, the FCI said.

The depletion underscores India’s tightening wheat supplies, which led the world’s second-biggest producer to ban exports last year despite a rise in global demand due to the Russia-Ukraine conflict.

Higher-than-normal temperatures have hit output in the past two crop years. India grows only one wheat crop annually, planted in the winter and harvested beginning in March.

After a disappointing harvest this year following crop damage in 2022, the FCI’s wheat purchases from farmers during the current season got off to a slow start. As a result, India failed to meet its procurement target for two straight years.

To augment domestic supplies and rein in local prices that have been trading above the government’s minimum buying level, New Delhi has opted to sell a record 10 million tons of wheat from state reserves to private flour millers and biscuit makers since June 2023.

While the current wheat stocks surpass the country’s minimum required level of 7.46 million tons for the quarter through June, they are well below the opening level of last year after the new season harvest replenished reserves in recent weeks.

India has so far resisted industry demands to allow wheat imports by reducing or eliminating the 40 per cent import tax, instead choosing to offload state stockpiles to the domestic market.

Tags: exports, Production, wheat, India, crop, imports, stockpiles, inventories, Food Corporation of India, warehouses