India’s cabinet approved Wednesday an earlier proposal to distribute 20.4 million tons of free rice and wheat to people covered under the nation’s food program for five months ending November, according to a government statement.

* Govt will spend 672.7 billion rupees ($9.1 billion) as subsidy for distribution of food grains to as many as 813.5 million people

* The beneficiaries will get 5kg of rice or wheat per person per
month: statement

** NOTE: The free allocation is in addition to the sale of same amount of subsidized food grain each month

* NOTE: The announcement was made by Prime Minister Narendra Modi on June 7, before a formal approval by the nation’s cabinet on June 23

 

Eoin Treacy's view

India has experienced some significant challenges in tackling its coronavirus outbreak and measures to support the poor are to be welcomed. Targeting the staple food sector also suggests Narendra Modi is working towards success in the 2022 interim and 2024 general elections.

The announcement of additional food aid was welcomed by the rough rice market. The price rebounded impressively over the last three days. The 2nd month continuation chart is back testing the upper side of a seven-year base formation and paused today. A sustained move above $14 would confirm a return to medium-term demand dominance.

The broad BSE500 remains in a clear uptrend and is outperforming the narrower large cap Nifty 50 by a substantial margin.