Wheat production will not drive food inflation in India. The reason is the world has overcome, if not shrugged off, the effects of the Ukraine war. The supply situation has changed from deficit to, perhaps, surplus in most agri-commodities.
Reasons to support the contention that ‘wheat production will not drive food inflation in India:
- Grain filling in wheat crop occurs at temperatures up to 35 degrees Celsius. The maximum shouldn’t cross 37 degrees before March-end. Last year, maximum temperatures breached the 35-degrees mark in the northern plains by mid-March and 40 degrees before the month-end. Last year the mercury spiked, leading to a marginal dip in India’s wheat output. This year, record February temperatures raised concerns about the current crop, but so far, the crop looks fine, with maximum temperatures hovering at 30-33 degrees in March.
- Global prices of urea and di-ammonium phosphate has fallen from recent peaks is quite steep.
- The UN Food and Agriculture Organization’s (FAO) food price index hit a historic high of 159.7 points in March 2022, the month that followed Russia’s invasion of Ukraine. But since then, the FAO index has fallen every month to touch 129.8 points in February 2023.
- Wheat prices at the Chicago Board of Trade futures exchange have more than halved since March 2022, and the US Department of Agriculture has projected all-time-high exports of wheat by Russia, Australia, and Kazakhstan.
- Palm oil prices in Malaysia have also retreated from an unprecedented high in March 2022, and record production and exports are expected of palm oil from Indonesia, soybean from Brazil and sunflower from Russia, alongside increased rapeseed supplies from Canada and the European Union.
- The decline in international food prices will help ease food inflation pressures in India caused by weather shocks and supply disruptions last year.
- The world has overcome the effects of the Ukraine war, with the supply situation changing from deficit to surplus.
- The falling international prices will also enable the Indian government to import wheat and other food items to meet domestic demand, if needed.
Prelims Pointer: Condition for wheat production
Wheat is a staple crop that is grown in many parts of the world. The conditions required for wheat production include:
- Climate: Wheat requires a temperate climate with moderate rainfall. It grows best in areas with an average temperature of 15-20°C during the growing season and a rainfall of 500-600 mm.
- Soil: Wheat can grow in a wide range of soils, but it prefers well-drained loamy soils with a pH range of 6.0-7.5. The soil should be rich in organic matter and have adequate nitrogen, phosphorus, and potassium.
- Sunlight: Wheat requires plenty of sunlight for photosynthesis and growth. It grows best in areas with at least 6 hours of direct sunlight per day.
- Water: Wheat requires adequate moisture throughout its growing season. Irrigation may be necessary in areas with low rainfall or prolonged dry spells.
- Pests and diseases: Wheat is susceptible to various pests and diseases, including aphids, armyworms, rusts, and smuts. Appropriate measures should be taken to prevent and control these pests and diseases.
Overall, the conditions required for wheat production vary depending on the variety of wheat being grown, the location, and the agricultural practices used. However, the above-mentioned factors are the key requirements for successful wheat production.