Russian wheat may shore up domestic stock
Russia via a government-to-government deal to augment domestic stocks amid rising prices, said people aware of the matter. The All-India Consumer Wholesale Price of wheat was up 6.2% to ₹2,633 per quintal on Wednesday, from ₹2,480 a year ago. Prices have risen as the government has imposed stockholding limits and sold the grain in the open market to traders amid concerns about a shortfall in domestic production.
«The possibility (of imports) is being discussed at the highest levels,» said a person aware of deliberations that are at an early stage. All-India retail inflation in cereals and products was 16.3% in June. Wholesale cumulative inflation in FY24 till June-end was 7.6%, having spiked 10.7% in FY23.
«Wheat, rice and coarse cereals have seen double-digit inflation over the past six months,» rating agency Crisil said in a report on Monday. A combination of low production, declining stocks and rising demand has fuelled the price rise. The government pegged India's wheat production at a record 112.7 million tonnes (mt) in 2023, but traders and millers estimate harvest at 101-103 mt due to unseasonal rains and hailstorms in February-March in the northern, central and western plains, which damaged the ripening crop.
The Foreign Agricultural Service of the US Department of Agriculture recently estimated India's wheat production at around 108 mt. Wheat output fell to 107.7 million tonnes in 2022, from 109.6 mt a year earlier because of a heat wave in March. The low harvest and rising demand depleted wheat stocks, causing market prices to inch up.
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