Wheat stocks above buffer but plunge to a 7-year low

Moreover, rice stocks, at 516.5 lt (inclusive of grain derived from un-milled paddy), were way above the corresponding January 1 normative minimum buffer of 76.1 lt.

Together with wheat, the overall stock levels of 680 lt were comfortably higher than the necessary 214.1 lt (164.1 lt operational requirement and 50 lt strategic reserve) for this time.

The current wheat stocks depletion comes even as retail cereal prices rose 9.93 per cent year-on-year in December, following 15 consecutive months of double-digit inflation from September 2022 to November 2023.

The Narendra Modi government has resorted to a range of measures for controlling cereal inflation – including banning exports of wheat and non-basmati white rice; not allowing wholesalers and big chain retailers to hold more than 1,000 tonnes of wheat; and selling grain from FCI’s stocks in the open market.

While these measures should help keep prices under check, especially ahead of Lok Sabha elections scheduled in April-May, a great deal hinges on the size of the wheat crop to be harvested from March-end.

Farmers have sown 336.96 lakh hectares (lh) area under wheat this time, up from last year’s 335.67 lh and the normal five-year-average of 307.32 lh.

“The crop that was sown early (from late-October to the first week of November) is coming close to heading (i.e. for the ‘baali’, or earheads bearing the flowers and eventually grain, to fully emerge from the wheat tillers). We were initially worried about the winter not setting in and temperatures ruling above normal till about mid-December. But now, both the weather and the crop (sown early as well as late after mid-November) look very good,” said Rajbir Yadav, principal scientist at the New Delhi-based Indian Agricultural Research Institute.

The wheat crop, though, is highly susceptible to temperature spikes – more so during March at the time of grain formation and filling. A sudden rise in mercury when the kernels are accumulating starch and proteins can impact yields through premature ripening, as it happened to the 2021-22 crop. A repeat of that – or even last year’s unseasonal heavy rains in March – could aggravate problems from already-depleted stocks and near double-digit cereal inflation, making imports inevitable.