Food prices have been under control and it’s possible a part of that is attributable to the FCI selling off stocks from its buffers.
While we still remain at 2x buffer needs (we are at nearly 600 lakh tonnes, when we only need 300), the attempt remains to sell off excess stock as seen from the graph above.
Excess Stocks (what’s above the buffer requirement) has been on a down trend and you can see it’s now the lowest in nearly three years:
It looks like the FCI has been told to rid itself of excess stocks of all kinds: wheat, rice and unmilled paddy:
This is really good news. Having excess buffer stock is of no real use. However, there will be a large purchase season coming up for rice (November) and hopefully we won’t go back to buying stuff in excess and storing it needlessly. We will have to buy of course, because of our silly policy of guaranteeing farmers a price regardless of how much quantity is produced, but we should at the same time dump the stocks in the open market to keep prices low.