India's Rice Surplus Doubles Target, Signals Comfortable Domestic Supplies
New Delhi, November 9, 2023 - India, the world's second-largest producer of rice, has revealed that its rice stocks in state warehouses are approximately double the target set for the beginning of November. Government sources disclosed this surplus, coupled with the new season crop entering the market, indicating a comfortable supply for the domestic market.
In a surprising move earlier this year, India, the world's leading rice exporter, halted non-basmati white rice exports in July, causing global rice prices to reach multi-year highs. The subsequent increase in rice stocks in the country's state warehouses is a welcome development for both the Indian government and consumers.
As of the latest data available, Indian rice stocks, including unmilled husk varieties stored in state warehouses, reached a staggering 19.7 million metric tons. These figures far exceed the local government rules, which require state-run warehouses to maintain 8.2 million metric tons of rice for the quarter beginning on October 1, in addition to an extra 2 million metric tons of rice as strategic reserves.
Indian farmers typically begin planting summer-sown rice during the rainy months of June and July, with the crop being harvested in October. The new season purchases made by India's state-run Food Corporation of India, the primary state-run grain buyer, are expected to further bolster rice inventories in state granaries. However, concerns have arisen due to an uneven monsoon, which is likely to impact this year's new season rice crop.
It is estimated that India's new season rice crop may decrease by as much as 8% compared to last year's record harvest, despite an increase in the area under rice paddy cultivation. The reduced output could have implications for the domestic rice market and, potentially, global rice trade.
Wheat stocks, another crucial staple crop in India, have also surpassed their target. State warehouses reported holding 21.6 million metric tons of wheat, exceeding the state-set target by more than 23%. This surplus in wheat stocks presents an opportunity for the government to offer more stocks to bulk consumers such as flour millers and biscuit makers, potentially helping to stabilize prices.
The Indian government has taken various measures to control prices, including selling wheat on the open market, as prices reached their highest levels in nearly eight months. Last year, India, the world's second-largest wheat producer after China, banned wheat exports due to concerns over weather conditions potentially impacting wheat output.
These substantial rice and wheat stocks in state warehouses are likely to be closely monitored in the coming months as India navigates the challenges of maintaining a balance between domestic supply and global trade. The country's ability to manage these surpluses effectively will play a significant role in determining the stability of food prices and the welfare of its citizens in the near future.