New Delhi: Despite the unabated rise in food prices, which gall With retail inflation hitting a five-month high of 7.41 per cent in September, the government has limited scope to intervene in the market by selling off public stock at calm prices.
Data from the Food Corporation of India (FCI) shows that the government’s wheat stock Earlier this month it was 22.7 million tonnes, which is less than half of what it was in October 2021 (46.8 million tonnes).
Wheat stocks at their lowest level in six years above Operational and strategic buffer norms of 20.5 million tonnes in October.
Another cause of concern is the rabi crop of winter wheat which is yet to be planted and will hit the markets only in April 2023. Retail wheat flour prices have risen 18 per cent year-on-year (till October 13).
In May, India banned Wheat exports had scorched the crop last month after scorching heat.
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where the rice stock stands
Compared to wheat, rice stocks are at comfortable levels, but future price outlook will depend on the actual crop size as farmers will start harvesting their kharif crop from this month.
The public stock of rice as of October stood at 20.5 million tonnes – close to doubling the stocking norm of 10.5 million tonnes. In addition, FCI is also sitting on around 12 million tonnes of unmilled paddy (October 2022).
In gap As for retail wheat flour prices, the year-on-year increase in retail rice prices was a modest 7.3 per cent till October 13.
However, additional rain in September damaged Early sown basmati rice in parts of Haryana and Punjab after delayed and scanty rains rubbed off Plantation in many states
For now, the Agriculture Ministry has projected Kharif rice production Fall Around 7 million tonnes in 2022-23 as compared to the previous year.
Food inflation is on the rise
Food inflation continues to remain high despite several attempts by the government to rein in it. Inflation figures released earlier this week reflect consumer food prices. Rose up 8.6 per cent year-on-year in September, marking Highest Monthly increase from November 2020.
A reading of the inflation data shows that the rise in prices of two food categories contributed the most to the spike – vegetables (18 per cent) and cereals (11.5 per cent).
The sustained rise in food prices was despite India’s decision to impose export restrictions on wheat and rice and reduce import duties on edible oils.
Apart from rice and wheat, several categories of vegetables have seen a sharp increase in prices.
Data from the Ministry of Consumer Affairs shows that the current retail prices of potatoes and tomatoes are 28 per cent and 13 per cent higher, respectively, year-on-year. Incessant unseasonal rains in October may further increase the prices of perishables damaged Vegetable crops along with cereals and pulses.
Apart from staples, milk prices have also increased (7 per cent year-on-year in September 2022) driven by hike in fodder price and lower milk production due to an outbreak of lumpy skin disease.
“Food prices, especially prices of cereals, milk and vegetables are the main culprits… and fresh arrival of kharif produce will provide some comfort on that front. RBI will be concerned about high food inflation and its adverse impact on inflation expectations,” said rating company Care Ratings in a note After the release of inflation data on October 12.
Meanwhile, the annual inflation rate based on wholesale food prices slacken For the month of September, there was a decline of 8.08 per cent on Friday, 9.93 per cent in August.
(Edited by Amritansh Arora)
Read also: Food ministry says rice production may hit due to deficient rains, banks ban exports to curb prices