While Indias norms on buffer stocks and strategic reserves require stocking 32 million tonne of food grains, Food Corporation of India (FCI) and state government agencies have stockpiled 61 million tonne 35.6 million tonne of wheat and 24.9 million tonne of rice. Bumper crop of wheat in the last two years and rice last year helped the agencies run up huge stocks. With the Food Security Bill coming up, the government is keen to stock excess grain.
According to a food ministry analysis, wholesale wheat and rice prices have been stable or declined in one year. This could help the government check food inflation which is now ruling around 10%.
Since last August, wheat wholesale prices have fallen from R1,230 a quintal to R1,185 down over 3.5% in a year while wheat prices fell to R2,000 a quintal from R2,100in Chennai. In Mumbai and Hyderabad, prices rose to R1,563 and R1,750 a quintal respectively this month, from R1,483 and R1,713 a year back. Wholesale rice prices in Delhi rose to R1,900 per quintal from R1,850 in one year. In Hyderabad, prices rose to R1,800 per quintal from R1,700 in the same period. However, in Mumbai, prices fell to R1,775 per quintal from R1,802 a year back.
A food ministry official told FE that huge stocks held with FCI and state government agencies have led to price stabilisation. Rice and wheat have not shown any substantial increase in the last year, he said.
According to latest food inflation data released last week, wheat price fell 2.8% from the same period last year, while the rice prices rose 6.02%. Meanwhile, vegetables and fruits have turned significantly costlier. FE reported last week that prices of vegetables and milk have risen more than 25% in the last two months leading to rise in food inflation.