It is no secret that India plays an important role in the global supply and demand picture, being the second largest producer and the second largest consumer of wheat and rice in the world.

In an effort to curb rising domestic food prices, the country announced it would release 5 million tons of wheat and 2.5 million tons of rice from its state stocks in favor of large domestic processors, Reuters reported.

Wheat prices in New Delhi jumped 12 percent in the past four months to 25,174 rupees ($303.85) a tonne, the highest level in nearly six months, as production was hit by erratic weather.

Other measures being taken at the local level include reducing or even eliminating a 40 percent tax on wheat imports, reducing the limit on the amount of wheat stocks that processors and traders can hold, a government official explained.

Recall that in June, India imposed a limit on the amount of wheat stocks that traders can hold in an attempt to lower prices. In May 2022, after a sudden rise in temperatures reduced production, the country banned exports, although exports increased to cover the global deficit caused by Russia's invasion of Ukraine.

According to official data from the Ministry of Agriculture and Farmers' Welfare, wheat production rose to a record 112.74 million tonnes in 2023 from 107.7 million tonnes a year earlier. India consumes about 108 million tonnes of wheat annually.

But a leading trade organization told Reuters that India's 2023 wheat crop was at least 10 percent lower than the agriculture ministry's estimate.

Exactly how much Indian production is is not clear, but the country is clearly worried about its food security. After last year's ban on wheat exports, India, which accounts for 40 percent of global rice exports, last month ordered an export freeze to calm domestic prices.