India Plans Further Actions to Stem Soaring Domestic Wheat Prices

India — the world’s third-largest wheat producer — took further steps this week to control domestic food price inflation, including an expected release of 2 million to 3 million tonnes from its wheat reserves and extending the suspension of futures trading of select commodities, including wheat.

India has struggled with rising food inflation since 2021, as shown by Gro’s India Food Price Inflation Index. Domestic wheat prices have soared, and are now at record high levels, prompting the country to ban wheat exports last May, as Gro wrote about here. 

A distribution of wheat reserves would come at a time when India’s wheat ending stocks are forecast to be the lowest in six years, potentially restricting future releases. In addition, Gro’s stocks-to-use ratio calculation for India wheat, a measure of available supplies, has dropped sharply for two years, and is now at its lowest level since 2016/17. 

View Gro’s India Wheat Yield Model & Balance Sheet, which includes charts showing yield forecasts, export volumes, and supply & demand balance sheet. 

Favorable prospects for India’s newly planted wheat crop could help bolster wheat supplies next year. Gro’s India Wheat Yield Forecast Model is pointing to a year-over-year improvement in yields, after last year’s crop was damaged by a late-season heat wave. In addition, higher wheat prices and favorable growing conditions are expected to lead to increased planting area. 

Indian officials, prior to the May wheat export ban, issued assurances that the country would help fill the global wheat supply gap stemming from the Russia-Ukraine war, which has threatened food security in many import-dependent countries. Global wheat inventories are forecast to continue their multi-year decline in 2022/23, as Gro highlighted in our outlook for 2023, “7 Major Themes for Agriculture in the Year Ahead: Gro’s 2023 Watchlist.”