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Extreme weather devastated both the winter-sown wheat and summer-sown rice harvests, pushing up retail food prices to a 22-month high. As a result, India's federally-owned cereal inventories, which offer subsidised grains to 80 crore people, have plummeted to a five-year low.

The government was only able to obtain approximately half of its target because farmers were increasingly selling to private merchants due to rising export demand as a result of the Ukraine crisis. While rice supplies are enough to cover domestic needs, wheat stocks have plummeted to a 14-year low.

According to data released by the Food Corporation of India (FCI) on October 13, the two staples' combined stockpile, at 51.14 million tonnes as of October 1, was more than 66% above the government's required buffer standard and strategic reserve inventory of 30.77 million tonnes for this time of year.

The government's food management operations will be restricted in order to meet the demands for food giveaways and maintain high prices. This is due to low state-owned cereal reserves.

Also Read: India exports wheat worth $650 million in March-April after announcing ban

Wheat production was hampered by a protracted heatwave in March, and as supplies ran low in May, the government decided to outlaw exports. In order to increase domestic availability, the government also established restrictions on overseas rice shipments last month. A 20% export fee was imposed, and damaged rice was not allowed to be shipped.

India's consumer inflation rate increased to a five-month high of 7.41% in September on an annual basis, up from 7% in August and continuing a nine-month streak of exceeding the Reserve Bank of India's (RBI) target range of 4-6%.

Also Read: Wheat export: Commerce Ministry tightens norms to prevent fraudulent practices

The government's efforts to lower prices have been hampered by food inflation, which spiked to a 22-month high of 8.4% in September. Similar to the previous month, the broad-based rise in food costs in September was the primary factor behind the increase in retail prices. Cereals, pulses, vegetables, milk, and milk products all continued to see price increases.

ABOUT THE AUTHOR

Sounak Mukhopadhyay

Sounak Mukhopadhyay, who also goes by the name Sounak Mukherjee, has been producing digital news since 2012. He's worked for the International Business Times, The Inquisitr, and Moneycontrol in the past. He's also contributed to Free Press Journal and TheRichest with feature articles. He covers news for a wide range of subjects including business, finance, economy, politics and social media. Before working with digital news publications, he worked as a freelance content writer.
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