India: Government must consider importing wheat and milk fat to keep food inflation under check

Published 2023년 1월 31일

Tridge summary

The Indian government has approved the sale of three million tonnes of wheat from the Food Corporation of India's warehouses to address rising prices of wheat and atta, which have doubled from last year. This decision is aimed at stabilizing the market ahead of the new crop season in late March. However, the small margin of public wheat stocks above the minimum required and the uncertainty of the 2022-23 wheat crop size due to early stages of grain formation raise concerns. Additionally, the government is considering importing 2-3 million tonnes of wheat and milk fat to stabilize dairy product prices, which have also seen volatility.

Disclaimer:The above summary was generated by Tridge's proprietary AI model for informational purposes.

Original content

Wheat and atta prices are on fire, retailing at an average of Rs 30 and Rs 35 per kg respectively, as against Rs 20 and Rs 25 a year ago. As a mitigatory measure, the Narendra Modi government has approved offloading three million tonnes (mt) of the cereal from the Food Corporation of India’s (FCI) warehouses into the open market over the next two months. The expectation is that this will help cool prices ahead of the arrival of new crops from end-March. But there are two possible hindrances. The first is that public wheat stocks, at 17.17 mt on January 1, are already at a six-year-low and marginally above the required minimum of 13.8 mt for this date. While the discontinuation of the additional 5-kg per-person per-month free grain supply through the public distribution system has given more leeway for the FCI to undertake open market sales, the overall stocks position is still quite precarious. The second source of uncertainty relates to the size of the 2022-23 wheat crop. Right ...

Source: UkrAgroConsult