Wheat and rice shares with authorities businesses have fallen to five-year lows, whereas retail grain costs hit a 105-month excessive in September.
According to Food Corporation of India (FCI) knowledge, the inventory of wheat and rice in public warehouses totaled 511.4 lakh tonnes (lt) as on October 1. (see desk).
Wheat shares weren’t solely at a six-year low at 227.5 liters as on October 1, but in addition from the minimal buffer of 205.2 liters (three months working inventory requirement and strategic reserve to fulfill procurement shortfall) for the date. was much more. However, the inventory of rice (together with grains obtained from unground paddy) was about 2.8 occasions greater than the required ranges. As a end result, the general grain inventory place was comparatively snug, regardless of having fewer grains in FCI godowns as in comparison with 4 years in the past.
The declining shares come whilst the patron worth index (CPI) for “grains and products” rose 11.53 p.c year-on-year in September. This was the best ever annual inflation for meals grains as per the present worth index, whose base yr is 2012. As per the outdated CPI, the earlier highest meals grain inflation was recorded in December 2013 at 12.14 per cent, with 2010 as the bottom yr. This is about eight years and 9 months in the past.
The fall in FCI shares is a matter of concern, particularly within the case of wheat. Annual retail inflation for non-PDS (public distribution system) wheat and flour touched an all-time excessive of 17.41 per cent in September, up from 15.72 per cent, 11.73 per cent, 10.06 per cent, 9.45 per cent, 9.59 per cent. , 7.77 per cent, 5.57 per cent and 5.10 per cent within the final eight months. Chances of discount in costs are restricted as farmers are but to sow wheat and the subsequent crop will hit the markets solely after mid-March.
Compounding the uncertainty are worldwide costs. Benchmark wheat futures contract costs on the Chicago Board of Trade Exchange fell from a report $12.94 per bushel on March 7 to $7.49 on August 18. But rising tensions in Ukraine have prompted a contemporary surge and costs closed at $8.82 a bushel. Bushel on Wednesday (one bushel equals 27.216 kg).
According to the newest World Grain Trade Report from the US Department of Agriculture, the export worth of wheat from Russia has elevated from $313 to $327 a tonne prior to now month, which is free. Prices or will increase have been even greater for wheat of different origins: European Union ($334 to $359), Australia ($372 to $376), Canada ($369 to $402), Argentina ($400 to $420) ) and US ($392 to $459). Adding sea freight and transport insurance coverage would additionally convey the price of Russian wheat to India to succeed in $365-370 per tonne. This involves the equal of Rs 30-30.5/kg on the port, which makes imports impractical until made within the authorities account with a view to replenishing the general public inventory.
With inputs from TheIndianEXPRESS
