India’s wheat stocks plummet to 14-year low

Extreme weather devastated both the winter-sown wheat and summer-sown rice harvests, pushing up retail food prices to a 22-month high. As a result, India’s federally-owned cereal inventories, which offer subsidised grains to 80 crore people, have plummeted to a five-year low.

The government was only able to obtain approximately half of its target because farmers were increasingly selling to private merchants due to rising export demand as a result of the Ukraine crisis. While rice supplies are enough to cover domestic needs, wheat stocks have plummeted to a 14-year low.

According to data released by the Food Corporation of India (FCI) on October 13, the two staples’ combined stockpile, at 51.14 million tonnes as of October 1, was more than 66% above the government’s required buffer standard and strategic reserve inventory of 30.77 million tonnes for this time of year.

The government’s food management operations will be restricted in order to meet the demands for food giveaways and maintain high prices. This is due to low state-owned cereal reserves.

Wheat production was hampered by a protracted heatwave in March, and as supplies ran low in May, the government decided to outlaw exports. In order to increase domestic availability, the government also established restrictions on overseas rice shipments last month. A 20% export fee was imposed, and damaged rice was not allowed to be shipped.

India’s consumer inflation rate increased to a five-month high of 7.41% in September on an annual basis, up from 7% in August and continuing a nine-month streak of exceeding the Reserve Bank of India’s (RBI) target range of 4-6%.

The government’s efforts to lower prices have been hampered by food inflation, which spiked to a 22-month high of 8.4% in September. Similar to the previous month, the broad-based rise in food costs in September was the primary factor behind the increase in retail prices. Cereals, pulses, vegetables, milk, and milk products all continued to see price increases.

Tags: India, extreme weather, food prices, cereal, demand, Ukraine, stockpile, harvest, export, rice, winter wheat, Production