The government of India is likely to extend the ban on wheat exports, which was imposed last year, until the end of the 2023-24 marketing season (April-June). The focus of the government will be on increasing procurement operations to maintain a comfortable level of grain stocks in the coming months.
The focus of the government will be on increasing procurement operations to maintain an adequate level of grain stocks in the coming months. The food ministry has approved the e-auction of 1.5 million tons of wheat from the Food Corporation of India's (FCI) stock, to be held on February 15, 2023, to curb the rise in prices and ensure food security for the country.
The reason for the ban on wheat exports is due to a decrease in wheat production in the previous crop year, which saw a 3% decrease due to heat waves that impacted the flowering stage of the crop.
This, coupled with higher global demand, resulted in the FCI's procurement falling by more than 56.6% in the 2022-23 marketing season. The agriculture ministry will release the first advance estimate of wheat output for the 2022-23 crop season (October-September) later this month.
Data from the department of consumer affairs show that the modal retail price of wheat and flour has increased over the past six months, with wheat retail inflation rising by 22.2% in December.
The FCI currently has a wheat stock of 15.7 million tons, which is above the buffer norm of 13.8 million tons for January 1st. The food ministry's assessment is that the wheat stocks held by the FCI by April 1, 2023, would be 9.7 million tons, which is above the buffer of 7.4 million tons.
The government of India is taking measures to maintain food security in the country by extending the ban on wheat exports, increasing procurement operations, and approving the e-auction of wheat from the FCI's stock. The aim is to ensure that grain stocks remain at a comfortable level through the coming months and to prevent a spike in prices.
