PremiumAccording to Food Corporation of India, reserves have declined in August to the lowest level for the month in 14 years, while wheat inflation is running at close to 12%.
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Less than four months after Prime Minister Narendra Modi boldly declared that India was ready to 'feed the world' after Russia’s invasion of Ukraine, the government needs to consider grain imports.
The effect of record-breaking heat wave -- started in March this year -- threatened Indian wheat output, resulting in cut production and pushed up local prices. The made everyday life more expensive for hundreds of millions of Indians, using wheat to make staple foods like naan and chappatis.
Citing a bumper wheat harvest wasn’t going to eventuate, the government restricted exports in mid-May.
According to Food Corporation of India, reserves have declined in August to the lowest level for the month in 14 years, while wheat inflation is running at close to 12%.
With the current situation prevailing -- looming shortage and rising prices, authorities are mulling to buy wheat from overseas. Also, officials are discussing whether to cut or abolish a 40% import tax on wheat to help flour millers in some regions to import grain, reported Bloomberg.
"Given a lot of the war risk premium has come off from global wheat prices, India can look at augmenting its domestic wheat supply via more imports. However, since domestic wholesale wheat prices are lower than global prices, a reduction in import duties will also be essential to make it a viable option," Bloomberg quoted Nomura Holdings Inc. economist Sonal Varma as saying.
India has never been a major exporter, despite being the world’s second-biggest wheat grower. On the import side, its overseas purchases was at about 0.02% of production annually.
As per authorities, the 2021-22 wheat harvest to come in at around 107 million tons, down from a February estimate of 111 million. However, traders and flour millers forecast 98 million to 102 million tons.
According to the food ministry, the wheat imports by government is expected to be less than half of levels in 2021.
Meanwhile, the consumer wheat inflation rose to 11.7% in July and the wholesale prices were up even more, by 13.6% in July, showed official data.
Though wheat is India’s biggest winter crop, concerns over rice production may take a surge as it could be the next challenge for global food supply.
With Bloomberg inputs.