At a time when supply concerns have pushed up global wheat prices to multi-year highs, India is sitting pretty comfortable with the grain stocks that scaled new highs for this time of the year.
Wheat stocks in the Central pool stood at a record 41.98 million tonnes (mt) as of early November, the start of the rabi planting season.
According to Food Corporation of India (FCI) data, wheat stocks with Central agencies were up four per cent at 41.98 mt this November compared with 40.29 mt in the same period a year ago.
Double the norms
Stocks this November are twice the quantum of 17.52 mt operational stocks and 3 mt strategic as of October 1. In fact, the stocks at the beginning of November have more than doubled over the past six years from 18.84 mt in 2016.
Trade sources said the increase in stocks is on account of higher production and carry-forward stock from the previous years. This is despite a rise in domestic off-take and a surge in exports in recent months.
The annual wheat production has been on an uptrend and the output touched an all-time high of 109.52 mt during the 2020-21 season, as per the fourth advance estimates. This was against 107.86 mt in the previous year.
“Production has been on the rise and so also consumption. The demand is back to normal. We should end up the season in March 2022 with stocks similar to last year, probably one or two mt lower,” said Pramod Kumar, Vice President, Roller Flour Millers Federation of India. Stocks at the beginning of April 2021 stood at 27.30 million tonnes.
The increase in global prices has led to higher demand for Indian wheat in the overseas market. At the same time, it is also influencing domestic prices, which are surging.
According to the Consumer Affairs Ministry, the all India daily average price of wheat in the wholesale market are up by 2 per cent at ₹2,409.25 per quintal, over a month ago, but down 2 per cent year-on-year.
“Prices are up as exports and tenders (under the open market sale scheme of FCI) are going at higher prices,” he said. As Indian prices are lower, there is a parity in exports.
According to APEDA data, wheat exports during April-August this year stood at 1.98 mt against 0.26 mt in the same period a year ago. In value terms, wheat exports have increased to $520 million during April-August this year over $72 million in the same period last year.