Foodgrain stocks with FCI at 6-year low in August
wheat stocks held with the Food Corporation of India (FCI) is at its lowest in the month of August since 2017. However, the government has set a target of procuring 521 lakh metric tonnes of rice for the kharif marketing season 2023-24 against last year's 495 lakh metric tonnes.
While the low stocks are worrying from inflation point of view, experts said it is not a concern from the food security angle.
The total foodgrain stocks with the FCI on August 22 are 523.35 lakh metric tonnes, out of which 242.96 lakh metric tonnes are rice and 280.39 lakh metric tonnes is wheat.
«While this is not worrying from a food security point of view since the stocks are still higher than the required norms, there is an overall hit to production this year which will keep the pressure on prices though government intervention by increasing domestic supplies can soften the price impact to some extent» said Dipti Deshpande, principal economist, Crisil, adding that India has historically stored more than required norms and so the current levels are not worrying.
With acreage under rice increasing this kharif season, the country will be fine on the rice side, said Rahul Bajoria, MD & Head of EM Asia (ex-China) Economics, Barclays adding, «wheat could be a little bit of a worry.»
Sowing of wheat happens in the rabi season which commences in October.
The Centre's procurement of wheat under its minimum support price (MSP) program, which is crucial for keeping its wholesale rates under control, stood at around 26.14 million tonnes much below the target of 34 million tonnes.
This has led the prices to stay firm, even during the harvest season, when they should be on the lower side.
