India's rice stocks hit record high, wheat reserves continue to deplete

India's rice stocks hit a record high at the start of January, reaching eight times the government's target, while wheat stocks continued to deplete as traders urged the government to increase wheat sales amid market shortages. 

Higher rice stocks would enable the world's biggest exporter of the staple to accelerate exports. However, dwindling wheat stocks will likely deter the government from releasing more stock to bulk consumers. 

Rice reserves in state granaries, including unmilled paddy, totalled 60.9 million metric tons of Jan. 1, compared to the government's target of 7.6 million tons, data compiled by the Food Corporation of India showed. 

Meanwhile, wheat stocks as on Jan. 1 stood at 18.4 million tons against a targeted 13.8 million tons, but were far below the five-year average of 26.7 million tons. 

Rice stocks have reached an alarmingly high level, said an exporter based in Kakinada in the southern state of Andhra Pradesh.

Paddy procurement is still ongoing in a few states, which will further complicate the government's task of creating storage space and disposing of them through welfare schemes, he said. 

India's rice exports have gained momentum after New Delhi removed most curbs in September and October. 

Wheat stocks are not comfortable, considering that the government has been selling far less wheat in the open market than last year, said a Mumbai-based dealer with a global trade house. 

The government plans to sell 2.5 million tons of wheat from state reserves to bulk consumers in the year ending March 2025, compared to 10 million ton in the previous season. 

"Flour mills are now seeking government supplies to continue their operations. Sufficient stocks are not available in the open market," the dealer said. 

Wheat prices in India jumped to a record high earlier this week on strong demand amid limited supplies.