Drought in Russia: Grain region particularly affected
In Russia, the main region for grain cultivation has been experiencing dry conditions for weeks. This is likely to result in lower yields and poorer quality than previously expected.
India is sitting on brimming grain reserves. After the government in New Delhi had largely banned the export of wheat and rice from domestic cultivation for several years, the Food Corporation of India (FCI), the state warehouse operator, now reports extremely high stocks. According to the news agency Reuters, around 37 million tonnes of wheat are currently stored. This surpasses the storage target set for July 1 by nearly 10 million tonnes. This is the highest level in four years, attributed to a good wheat harvest on the subcontinent.
India is the second-largest wheat producer in the world after China. In response to sharply rising food prices in its own country, caused by a heat-damaged poor harvest, an export ban on wheat was imposed in 2022. Only in March of this year were the last export restrictions on grains lifted.
No imports necessary
Market experts believe that the high stock levels should be sufficient to meet India's domestic demand without imports. The government plans to invest $15 billion (13 billion euros) over the next five years to increase grain storage capacity by 70 million tonnes. The goal is to build enough capacity to store the entire grain production in the future. The reserves will be used, among other things, to mitigate possible price spikes throughout the year through higher sales on the open market.
Record harvest expected
The Ministry of Agriculture in New Delhi expects India to produce a record amount of around 117.5 million tonnes of wheat this year; this would be about 2.1 million tonnes or 2% more than in 2024. Rice production is also expected to reach a new high. The agriculture department estimates 149 million tonnes, up from 137.8 million tonnes last year.