New Delhi: The prices of food grains are increasing continuously in India. In September, grain inflation reached its highest level in 105 months. In the midst of rising inflation, another bad news has come to the fore. The country’s grain stock has reached a five-year low. Worryingly, the stock of wheat in the godowns of the Food Corporation of India (FCI) has remained the lowest in the last 6 years and is just a little more than the minimum buffer stock.
According to a report in the Indian Express, the Food Corporation of India (FCI) data show that the total stock of wheat and rice in public warehouses stood at 511.4 lakh tonnes on October 1. A year ago this figure was 816 lakh tonnes. The government has banned the export of wheat and broken rice only to prevent the prices of wheat and rice from rising in the country and to supply them adequately in the domestic market.
Wheat stock at a worrying level
On October 1, 2022, there was a stock of 227.5 lakh tonnes of wheat in government warehouses. This is the lowest level of wheat storage in the last 6 years. Not only this, it is only slightly higher than the minimum buffer stock of 205.2 for this date. However, the stock of rice (including grains obtained from unground paddy) was almost 2.8 times higher than the required levels. That is why the overall grain stock position in FCI godowns is relatively better as compared to 4 years ago. Despite the increase in inflation in September, the shortfall in grain storage is worrying. In September 2022, the inflation rate of cereals and cereal products has been 11.53 percent. This is the highest annual rate for cereals.
Increased rates of wheat and flour
If we look at the retail inflation data for September, it is found that the annual retail inflation rate of wheat and flour has reached 17.41 percent. This is the highest in the last eight months. In August it was 15.72 percent, then in July, this rate was 11.73 percent. The possibilities of reduction in the prices of wheat and wheat flour are limited, as farmers are yet to sow wheat and the next crop will start arriving in the markets only after mid-March.
Wheat prices fall below record levels in the global market
However, the prices of wheat have declined in the international market. Benchmark wheat futures contract prices on the Chicago Board of Trade Exchange fell from a record $12.94 per bushel on March 7 to $7.49 on August 18. As the ongoing war between Ukraine and Russia once again intensified, the prices increased on Wednesday, 12 August, to $ 8.82.
