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Record Wheat Sales Drain India's Stockpiles, Prompting Import Concerns

19 Apr 2024 4:15 pm
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Mumbai, April 18 (Commoditiescontrol):India's government-held wheat stocks have dwindled to their lowest point in 16 years. The decline comes after back-to-back years of reduced crop yields, leading New Delhi to sell record volumes of wheat in an attempt to stabilize domestic prices.

Wheat reserves held in state-run warehouses totaled 7.5 million metric tons at the start of April. This marks a drop from 8.35 million tons the previous year, according to data from the Food Corporation of India. Historically, April 1 wheat stocks have averaged 16.7 million tons over the past decade.

The reduced wheat supply stems from two years of poor harvests. To combat rising prices, the government sold 10 million tons of wheat from its reserves in a record push to bolster domestic supply.

Despite the tight supply situation, India has so far declined calls to encourage wheat imports by reducing or eliminating the current 40% tax. The government is also hesitant to buy directly from major suppliers like Russia. Instead, the focus has been on selling state-owned wheat to bulk consumers such as flour millers and biscuit makers to curb rising prices.

A senior government official stated that "even after selling a massive quantity, we managed to ensure that the stock level didn't fall below the buffer norm." Moving forward, the government aims to keep wheat stocks above 10 million tons.

To achieve this, the government must procure between 30 to 32 million tons of wheat from farmers. This will help ensure stock levels remain above the buffer norm for the upcoming season. However, the government has fallen short of its wheat procurement targets in both 2022 and 2023 due to heat waves negatively impacting harvests.

(By Commoditiescontrol Bureau; +91-9820130172)


       
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