In response to surging food inflation, which soared by a significant 11% in July, the government has taken a series of measures to address the situation. The latest move involves imposing comprehensive export restrictions on cereals. These steps are aimed at curbing the sharp rise in consumer inflation, which reached a 15-month high of 7.44%.

The government had previously banned wheat exports in May 2022 due to a reduced crop yield attributed to extreme heat conditions. This year, the focus has been on strengthening domestic food reserves due to concerns about an erratic monsoon season that could be affected by the El Nino weather phenomenon.

El Nino, characterized by elevated ocean temperatures globally, often leads to drought conditions in India by suppressing the monsoon.

To combat cereal inflation, the government has adopted a dual strategy. First, it has suspended cereal exports, and second, it has been releasing stocks from state-controlled storage facilities.

In a recent move on August 8, the central government announced the release of an additional five million tonnes of wheat and 2.5 million tonnes of rice through auctions. Additionally, a decision was made to lower the reserve price of rice from ₹31 per kg to ₹29 per kg to encourage greater quantities to be sold to traders.

Dharmakirti Joshi, Chief Economist at Crisil Ltd, highlighted that the current threat to food inflation arises from excessive rain-induced damage to vegetables. Joshi’s assessment underscores the vulnerability of pulses due to prevailing production trends.

As the government adopts measures to address food inflation, the focus remains on stabilizing prices and ensuring adequate food availability for consumers.

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