India's rice stocks reached a new high at the start of January, eight times the government's target, while wheat stocks continued to fall as traders urged the government to increase wheat sales in the face of market shortages.
Increased rice supplies would allow the largest exporter of the staple in the world to increase exports. But declining wheat supplies will probably discourage the government from supplying more to large buyers.
According to data compiled by the Food Corporation of India, rice reserves in state granaries, including unmilled paddy, totaled 60.9 million metric tons on January 1, compared to the government's target of 7.6 million.
In the meantime, wheat stocks as of January 1 were 18.4 million tons, well below the five-year average of 26.7 million tons, compared to the targeted 13.8 million tons.
According to an exporter from Kakinada, in the southern state of Andhra Pradesh, rice stocks have risen to an alarmingly high level.
In some states, paddy procurement is still going on, which will make it more difficult for the government to build storage space and get rid of them through welfare programs, he said.
Following the removal of the majority of restrictions in September and October, India's rice exports have accelerated.
According to a Mumbai-based dealer with a global trade house, wheat stocks are not comfortable because the government has been selling much less wheat on the open market than it did the previous year.
Compared to the 10 million tons sold during the previous season, the government intends to sell 2.5 million tons of wheat from state reserves to bulk buyers in the year ending March 2025.
“Flour mills are now looking to the government for supply to continue their operations. Sufficient stocks are not available on the open market,: the dealer stated.
Due to strong demand and limited supply, wheat prices in India spiked to a record high earlier this week.
