An uncertain world needs food, fuel, forex buffers

📌 Summary:

• Context: The ongoing West Asia conflict is called the largest oil shock in history, removing about a fifth of the world's daily supply transiting the Strait of Hormuz — yet global crude prices did not surge as in 2022 or 2008
• Causal chain (why prices stayed contained): (1) an IEA-coordinated action on March 11 released ~426 million barrels from member countries' emergency stockpiles over four months; (2) this put a lid on crude, which settled at $90-110/barrel in April-May and eased to $70-80 by mid-June; (3) but oil buffers are now running thin after the earlier drawdowns as hostilities resumed
• Food buffers: Food Corporation of India's rice and wheat stocks stood at 121.7 million tonnes (June 1) — nearly thrice the required minimum; agencies hold 4+ mt of pulses; the world is awash with record 2025-26 harvests of wheat, rice, corn, sugar, soyabean, palm oil, rapeseed — a cushion against El Nino-induced disruptions
• Historical precedent/contrast: in 2022, at the start of the Russia-Ukraine war, buffers were inadequate (still recovering from Covid supply-chain shocks); India's situation was worsened by the strong 2023-24 El Nino that caused prolonged food inflation
• Core argument: accumulating large reserves — forex, food and fuel — is now central to policymaking amid rising climate and geopolitical risks; there is a cost to stockpiling (like maintaining a standing army), proven useful only during supply shocks
• Solution: government should have an integrated strategic-reserves policy covering all three 'Fs' (food, fuel, forex), weighing the fiscal cost against strategic value and the feasibility of stocking various commodities

🎯 UPSC Relevance: GS3 Economy — food security, energy security, strategic reserves (SPR/buffer stocks), and macroeconomic stability amid geopolitical and climate risk; links to FCI operations and balance of payments resilience

📝 Prelims Facts:

• FCI rice+wheat stock: 121.7 mt (June 1), nearly 3x the minimum buffer norm
• IEA coordinated release of ~426 million barrels from member stockpiles (announced March 11)

🔑 Key Term: Strategic reserve/buffer stock — a stockpile of a critical commodity (food, fuel, forex) held to cushion the economy against supply shocks from war, weather or a balance-of-payments crisis