Indian wheat stocks held in government warehouses were half the level of a year ago on Nov. 1, government data showed on Monday, but inventories were marginally higher than the official target.
Wheat reserves in state stores totalled 21 million tonnes at the start of this month, down from 42 million tonnes on Nov. 1, 2021, but still slightly higher than the official target of 20.5 million tonnes for the quarter ending Dec. 31.
Wheat inventories at government-run granaries stood at 22.7 million tonnes on Oct. 1.
Lower state reserves could hobble the government’s efforts to release stocks to cool wheat prices, something it does regularly for bulk buyers such as flour and biscuit makers.
Wheat prices have surged in India despite the world’s second biggest producer of the grain implementing a ban on exports in May as it was stung by a sudden drop in crop yields.
Market arrivals from the previous harvest, meanwhile, have slowed to a trickle as farmers run down their stores.
Indian wheat prices are expected to remain elevated until the new-season crop arrives on the market early next year, growers and traders say.
If weather conditions remain favourable and temperatures do not rise abnormally during March and April’s harvest, India’s wheat output could bounce back to 2021’s level of 109.59 million tonnes given the good start to the planting season.
Indian farmers have planted wheat on 4.5 million hectares since Oct. 1, when the current sowing season began, up 9.7% from a year ago.
Local wheat prices jumped to a record 26,500 rupees ($324) a tonne on Thursday, up nearly 27% since the May ban on exports.
India is also weighing dropping a 40% tax on imports.