Wheat stocks at six-year low; prices touch fresh high, shows data

The wheat stock in the central pool reached its lowest level in the past six years as on December 1, 2022, while prices touched a record high of nearly Rs 2,900 a quintal in North Indian markets even as sowing continued at a brisk pace, raising hopes of a good harvest if weather remains favourable in the coming months.

According to the latest data from the Food Corporation of India (FCI), the stock was at 19.02 million tonnes, which was the lowest since December 2016, when it was at 16.5 million tonnes.

It is, however, 38 per cent more than the January 1 buffer requirement of 13.8 million tonnes, which the government needs to maintain for ensuring food security.

The government in a statement in Parliament on Thursday said there would be further deterioration in the stock but it would be above the buffer norm.

It said by January 1 the stock would drop to 15.9 million tonnes.

It said the government had sufficient food grain in the central pool to meet the requirements of the National Food Security Act and its other welfare schemes as well as for additional allocations under the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY).

Meanwhile, prices have been climbing to new levels almost regularly owing to the near absence of any open market sale by the government and empty pipeline stocks with flour traders.

Some reports said the Central government might take a decision on liquidating some of its stock by early next month, when a clear picture would also emerge on whether the PMGKAY would be extended beyond December 31.

An extension of the scheme is bound to put pressure on the stock, particularly that of wheat, and further crimp the government’s ability to make a meaningful intervention in the open market to cool prices.

Wheat acreage during the week ended December 16 was nearly 3 per cent more than in the same period last year as sowing nears its end in most parts of the country, the data showed.

According to the latest data from the Department of Agriculture, till Friday wheat has been sown in around 28.65 million hectares, which is 0.82 million hectares more than the area covered during the same period last year.

In total, wheat is sown in around 30.5 million hectares every year, which means the bulk of the sowing is already over.

The main concern now is the weather but here too there are positive signs: The winter chill with ground frost and mild rain is expected to hit North India in the coming days.

Rabi crops have been sown in around 57.81 million hectares, which is 4.69 per cent more than in the same period last year.