Amid reports claiming that India may have to import wheat due to insufficient stocks in the domestic market, the government on Sunday issued a clarification saying that it had no such plans and that the country had enough of the essential commodity for public distribution.

The reports came months after the country banned wheat exports to ensure food security amid a sharp increase in prices and a decline in output due to the heatwave.

What's ailing wheat in India?

Concerns over wheat production emerged earlier this year as several parts of the country saw an unusual summer with record heatwaves threatening to reduce output. Government officials in May had said that India's expected production for 2022-23 was at 105 million metric tonnes (MMT), much lower than the earlier estimate of 111 MMT.

Out of the 105 MMT, about 30 MMT is needed for food security schemes such as National Food Security Act (NFSA), PMJKAY and OWS, said the government sources. About 42 MMT of wheat was distributed under NFSA and PMGKAY in the last financial year, they added.

Traders and flour millers are forecasting only 98 million to 102 million tonnes of production this year, as per a Bloomberg report.

According to the report that cites official data, India’s wheat reserves have fallen to a 14-year low in August even as the inflation hits close to 12 percent. Consumer wheat prices increased 11.7 percent in July, while wholesale prices saw a rise of 13.6 percent last month, it added.

A rise in domestic wheat prices due to lower output amid a severe summer resulted in India banning the export of the commodity in May. However, wheat flour exports have gone up sharply since then.

According to Mint, while the atta exports in FY22 were at 500,000 tonnes, India was shipping nearly 100,000 tonnes every month after the wheat ban.

It is to be noted that India’s wheat imports have been at a nominal 0.02 percent of production annually as it is the world’s second-largest commodity producer. The country, however, is not a major exporter.

World Bank expects agricultural commodity prices to remain much higher than its earlier projections.

"Wheat prices, in particular, are forecast to increase by more than 40 percent this year, reaching an all-time high in nominal terms. While prices generally are expected to peak in 2022, they are to remain much higher than previously forecast," it had said in its Commodity Market Outlook report.

First Published:Aug 22, 2022 5:44 PM IST