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Wheat Prices Spike Over 8% in Two Weeks; Government Begins Selling to Millers
Record High Wheat Prices in India Spark Concerns Over Supply and Inflation
Indian wheat prices surged to an all-time high on Monday as dwindling supplies and strong demand from flour mills strained the market, industry officials reported to Reuters. Flour mills are struggling to secure enough grain to operate at full capacity, even at record prices, according to Ajay Goyal, managing director of Shivaji Roller Flour Mills.
The rising prices are expected to increase retail inflation, which had eased in November after reaching a 14-month peak in October. This trend may influence the central bank’s monetary policy decisions, including potential interest rate cuts.
In December, the government reduced the wheat stock limits for traders and millers to increase availability and curb prices. However, the measure has not achieved its intended impact, with prices in New Delhi reaching ₹33,000 ($384.66) per metric ton—far above the government’s minimum support price of ₹22,750 for the previous season.
Pramod Kumar, a flour miller, noted that private players hold limited stocks, requiring the government to release more wheat from its reserves to meet demand. While the Food Corporation of India (FCI) has been selling 100,000 metric tons of wheat weekly to bulk consumers, the supply is insufficient.
In November, the government announced plans to release 2.5 million tons of wheat from state reserves by March 2025—a sharp decline from the nearly 10 million tons sold during the previous season. Limited surplus wheat in FCI reserves constrains the agency from offering more to private players, said a New Delhi-based dealer with a global trade house.
As of early December, wheat stocks in state warehouses stood at 20.6 million tons, slightly higher than last year’s 19.2 million tons but significantly below the five-year average of 29.5 million tons.
World Food Business
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