India heavily influences the global rice market, Mustafa said. “But we also have to see how crops fare in competing suppliers and in important rice buyers.”
Inventories totaled almost 38 million tons this month, according to the state-owned Food Corporation of India. It’s also holding more than 32 million tons of the unprocessed grain, equivalent to about 22 million tons of rice, data showed. The country maintains wheat and rice reserves for various welfare programs, including 5 kilograms of free grains per person every month to needy people.
The government last month allowed the use of 2.8 million tons of rice from state reserves for ethanol manufacturing, in addition to 2.4 million tons approved earlier, according to the Hindu Businessline newspaper. It was a highly unusual move for the important food staple, and a bigger crop could spark further steps.
Still, more than 140 million people remain excluded from the food distribution program, due to the continued use of decade-old population data to calculate beneficiaries. India plans to spend about 2 trillion rupees ($23 billion) in the fiscal year ending on March 31 to run the world’s biggest food program.
The federal government purchases cereals such as rice and wheat from farmers at guaranteed prices and distributes the grain to about 800 million people through a vast network of retail shops. These assured prices aim to shield farmers from distress sales in the open market.
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