Foodgrain Stocks Surge 18% YoY, Government Ensures Market Stability by Amit Gupta, Kedia Advisory
India's foodgrain reserves in the Central Pool rose by 18% year-on-year, reaching 83.78 million tonnes as of February 1. Wheat stockpiles stood at 16.17 million tonnes, marking a 22% rise, while rice reserves increased by 17% to 67.6 million tonnes. The government sold 10 million tonnes of wheat under the Open Market Sale Scheme (OMSS) last year to control price hikes, but rice offtake remained low. This year, wheat sales began late but are now being aggressively pursued. Additionally, rice is being offered to ethanol distilleries at Rs 2,250 per quintal to ensure adequate ethanol supply. Experts believe these ample stocks will help stabilize market prices and manage procurement fluctuations.
Key Highlights
# Foodgrain reserves up 18% YoY at 83.78 million tonnes in February.
# Wheat stock rises 22% to 16.17 million tonnes, rice up 17% to 67.6 million tonnes.
# Government aggressively selling wheat under OMSS to curb prices.
# FCI rice offered to ethanol distilleries at Rs 2,250 per quintal.
# Experts suggest strong reserves will stabilize prices amid procurement uncertainties.
India’s foodgrain reserves under the Central Pool saw a significant increase, reaching 83.78 million tonnes as of February 1, an 18% rise compared to last year. Wheat stocks surged by 22% to 16.17 million tonnes, while rice reserves grew by 17% to 67.6 million tonnes. These rising inventories provide the government with a cushion against market fluctuations and procurement uncertainties.
Higher foodgrain reserves allow the government to take strategic steps in managing price stability. Last year, 10 million tonnes of wheat were offloaded under OMSS to control inflation, while rice offtake remained minimal. This year, the government started wheat sales late but has since intensified efforts to reduce market prices.
Apart from price control, the government has been supplying FCI rice to ethanol distilleries at Rs 2,250 per quintal. This initiative aims to meet ethanol production targets by supplementing maize-based ethanol, especially if supply shortages occur. A total of 24 lakh tonnes of rice has been allocated for this purpose.
With a strong stock position and proactive policies, the government is well-equipped to handle supply fluctuations and stabilize foodgrain prices in the coming months.
Finally
India’s foodgrain reserves remain robust, ensuring price stability and strategic market interventions. Aggressive wheat sales and ethanol-linked rice allocations will help balance supply-demand dynamics in the coming months.
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