Summary: India's march towards self-reliance has been a long, and arduous one. In the mid 1960s, food grain shortage had prompted the then prime minister Lal Bahadur Shastri to ask the people of the country to skip a meal every week. Drought had ravaged the country two years running, in 1966 and 67, and India imported its highest ever quantity of wheat under PL480 that year. It was 10 million tonnes. But, the Green Revolution and several other schemes made India self-reliant in food production. So earlier this year, when the world was staring at a wheat shortage due to the Russia-Ukraine war, India was expected to rise to the occasion. Its wheat export doubled in the first five months of the ongoing financial year. But extreme weather played spoilsports. Wheat production dipped and so did its procurement. According to Food Corporation of India data, at 22.75 million tonnes, wheat stocks in public godowns on the first of October were at a six-year low and just above the minimum buffer requirement of 20.52 million tonnes for that date. Meanwhile, at 28.39 million tonnes, rice stocks, including grain derived from un-milled paddy, stood at nearly 2.8 times the minimum buffer of 10.25 million tonnes. Overall, wheat and rice stocks with government agencies stood at 51.14 million tonnes as on the first of October. Not only did this represent a 37 per cent decline from the 81.6 million tonnes in stocks a year ago, it was also the lowest level for the same date since 2017. The fall coincides with the consumer price index-based inflation for the month of September surging to a five-month high of 7.4 per cent, largely due to a spike in food inflation, which jumped to a 22-month high of 8.6 per cent for the same period. Meanwhile, the consumer price index for cereals and products rose 11.53 per cent year-on-year in September, representing the highest-ever annual inflation for cereals according to the current price index. While the overall cereal stocks position appears to be relatively comfortable for now thanks to the rice stocks, things could change going ahead due to persistently high inflation. With regard to non-PDS wheat and atta flour, annual retail inflation hit an all-time high of 17.41 per cent in September. Market players and traders hope that the prices of agri commodities will soften as the arrival of kharif crop peaks in the weeks ahead. However, the decline in prices could be limited when it comes to cereals because of the low stocks in government godowns and damage to the standing harvest due to the late withdrawal of the southwest monsoon. A decline in prices is also improbable because the next wheat crop will hit the markets after mid-March next year. Thus, the declining stocks of the foodgrain could become a cause for concern. In the open market, wheat prices have largely stayed above the minimum support price, or MSP, of 2,015 rupees per quintal this year. There are two reasons for this. First, there has been a drop in production because of a rise in temperatures during the crucial harvest months of March and April this year. The second one is favourable demand. Meanwhile, the Russian invasion of Ukraine has pushed up global wheat demand, which has caused a price spike in Indian markets. Owing to this sharp jump in prices and a massive drop in procurement, the Centre in May imposed a ban on exports. However, that did little to cool prices and the markets have been trading above the MSP due to the fact that there are no pipeline stocks with flour millers. The drop in procurement has also limited the Centre's ability to intervene in domestic wheat markets to cool prices through open sales. Meanwhile, despite a slowdown in exports after the sudden mid-May ban, India exported 4.35 million tonnes of wheat during April-August this year, amounting to a 116.7 per cent increase compared to the corresponding months last year. Exports of the foodgrain received a boost after demand for Indian wh
