Food for thought: The Indian monsoon and foodgrain exports

The monsoon season is truly upon us in Mumbai, India’s financial capital. It has been raining- nay pouring all night and well into the morning. The rains are a welcome change from the hot and humid summer that we went through. So far, the monsoon has advanced only into South India and parts of West and East India. India’s North eagerly awaits its turn and swelters at 50C.

It is the North of India (including the states of Punjab and Haryana and the vast Gangetic belt) that leads India in the production and procurement of foodgrain – so essential to feed the country’s 1.4 billion people and millions in Asia and Africa who depend on India’s exports of rice and (sometimes!) wheat for food.

India had the highest export volume of rice worldwide at 16.5 million tons (FY 2023-24). Thailand followed at half that- just 8.2 million tons in that year. India’s rice exports account for nearly 40% of the global market. In an election year, the Modi government placed restrictions on rice exports to control food inflation. With elections safely out of the way, a good crop of paddy post-monsoon should help improve availability of rice for exports.

It is more complicated with wheat, India banned exports of wheat in 2022 but 6 million tons of wheat were liquidated from the stock because the Russian war with Ukraine sent global prices spiraling. While India has not announced plans to import wheat, the 100 to 125 million tons of wheat procured will add to the stockpile- provided the farmers cooperate!

Indian farmers have been critical of Government procurement at “low” prices and restrictions on Agri exports. The threat of violent protests has been kept under check, at least for now. The Government has announced generous Minimum Support Prices (MSP) for 14 crops for the kharif (June- July sowing) season.

Good rain this monsoon will translate into bumper crops and rural prosperity. This helps the entire economy- from peddlers of soap and toothpaste to bankers and builders. Modi 3.0 will be keeping an eye on the progress of the monsoon- and so will rice and wheat consumers in India and beyond.