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When the Russia–Ukraine conflict broke out in 2022, the world was still recovering from post-pandemic supply chain disruptions. The war sent international prices of food and other commodities soaring. The benchmark FAO Food Price Index touched an all-time high of 160.2 in March that year, while Brent crude futures crossed $139 per barrel on March 7. By contrast, recent geopolitical tensions — whether in Venezuela, Iran or Greenland, not to mention US President Donald Trump’s tariffs — have had minimal impact on global commodity markets. Prices remain well below their 2022 peaks. The global food price index averaged 124.3 points in December, while Brent crude is trading at around $65 per barrel.

On the supply side, the world is moving towards surpluses. Global wheat production is projected to hit a new high, driven mainly by output in the European Union and Argentina. The same trend is visible in rice, corn and barley, led by India, the EU and the US.

Oilseeds are also set for bumper harvests, with strong soybean and palm oil production in Brazil and Indonesia. In India, government stocks of wheat and rice as of January 1 were nearly 4.5 times the required minimum buffer level. A good kharif harvest and a likely strong rabi season — supported by healthy rainfall and moderate temperatures in 2025 — have further strengthened supply conditions.

This supply comfort, both globally and domestically, is a redeeming feature at a time when the rupee and stock markets are under pressure due to continued foreign portfolio outflows. Soft commodity prices are cushioning the impact of a weakening rupee, which might otherwise have triggered imported inflation.

The Union Budget, therefore, should focus firmly on macroeconomic stability. This is not the time to ease off fiscal consolidation. A clear glide path is needed for reducing deficits and debt ratios of both the Centre and state governments. While geopolitical risks and global uncertainty lie beyond government control, macroeconomic stability and policy predictability do not — and must remain priorities.