Wednesday, 29 June 2022

Wheat stocks in India may drop to their lowest level since ’16-17

Wheat stocks in India may drop to their lowest level since ’16-17

India’s federally held wheat stocks in 2022-23 may fall to their lowest level since 2016-17 and second-lowest in the past 13 years, with the government’s cereal purchases likely being the lowest in 15 years. The wheat offtake, which refers to withdrawal for subsidized distribution and open-market sales, has risen 38% over the last two years.

On May 13, India said it was suspending exports of wheat to manage its food security in a country that is “at risk.”

The food ministry has said it had sufficient stocks to run the public distribution system smoothly. However, lower output due to prolonged heat in March and record exports have necessitated quantities of the winter staple supplied through food schemes, pointing to a high demand-supply situation.

The Indian government’s export ban was prompted by a sudden rise in CPI, which increased to 7.79% at eight-year, while food inflation was around 8.38%. Cereal inflation was too high at nearly 6%.

The Indian government has kept a window open for overseas sales should a foreign neighboring government request. According to some analysts, an emerging issue is whether India can afford to export more wheat after overseas record sales on March 31 and if the country will witness a further spike in domestic food prices.

Wheat stocks in India may drop to their lowest level since 16 17 1unsplash image

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As per food secretary Sudhanshu Pandey, the country’s opening stock of wheat was around 19 million tonnes, lower than last year’s 27.3 million tonnes.

Ramandeep Singh Mann, a farm expert, said

Yet, managing many cheap food schemes with these stock levels will be a tight exercise. “We had been screaming since the heatwave to review exports,”

Of 37.5 million tonnes of total state-held stocks, the government needs to set aside 7.5 million tonnes of complete state-held supplies due to emergency reserve norms as of March 31.

The country is required by food-security law to distribute cheap grains to around 813 million people, separately from catering to other welfare schemes, such as school mid-day meals.

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