India’s rice stockpile hits record levels amid wheat supply crisis

INDIA – As of January 1, 2025, India’s rice reserves have soared to 60.9 million metric tons, a substantial increase from the government’s target of 7.6 million tons.

This surplus positions India, the world’s largest rice exporter, to potentially accelerate exports, capitalizing on the global demand for the staple.

However, the exporter from Kakinada in Andhra Pradesh cautions that the ongoing paddy procurement in several states could complicate storage management and the distribution of rice through welfare schemes.

In contrast, wheat stocks are depleting, standing at 18.4 million tons as of January 1, 2025, surpassing the targeted 13.8 million tons but significantly below the five-year average of 26.7 million tons.

The Mumbai-based dealer with a global trade house notes that the government’s reduced wheat sales in the open market have contributed to the current shortage.

The government’s plan to sell 2.5 million tons of wheat from state reserves to bulk consumers in the year ending March 2025, compared to 10 million tons in the previous season, has not been sufficient to meet the demand.

The scarcity of wheat has led to record-high prices, with wheat trading at approximately 30,000 rupees per metric ton, significantly above the government support price.

This surge is attributed to strong demand amid limited supplies, with flour mills seeking government supplies to continue operations. The dealer emphasizes that sufficient stocks are not available in the open market, exacerbating the challenges faced by the milling industry.

In response to the wheat shortage, the government has approved a 6.59% increase in the Minimum Support Price (MSP) for wheat, setting it at 2,425 rupees per quintal for the 2025-26 marketing season.

This move aims to encourage farmers to expand wheat cultivation and reduce reliance on imports. The decision aligns with the Union Budget 2018-19 commitment to fix MSPs at a level of at least 1.5 times the all-India weighted average cost of production.

The depletion of wheat reserves raises concerns about India’s ability to maintain food security for its 1.4 billion population.

Additionally, the anticipated warmer winter temperatures could further threaten wheat yields, as the crop requires cold weather for optimal growth. However, the India Meteorological Department forecasts fewer cold wave days between December and February, potentially impacting wheat and rapeseed production.

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