India wheat prices jump to 6-month high on demand, limited supply
The Hindu
Wheat prices in India surge to 6-mo. high due to limited supplies and robust demand. Govt. may cut/abolish 40% import tax to bolster supplies and control prices ahead of polls. Wheat output rose to record 112.74 million metric tonnes in 2023, but trade body estimates 10% lower. Govt. may release stocks to avoid potential shortages.
Indian wheat prices surged to a six-month high on Tuesday due to limited supplies and robust demand ahead of the festival season, dealers said.
The increasing prices may prompt New Delhi to eliminate import duties on the cereal to bolster supplies and control prices ahead of key state polls and next year's general election.
Rising wheat prices could contribute to food inflation and potentially complicate the efforts of both the government and the central bank to contain inflation.
"In all key producing States, farmer supplies have nearly come to a halt. Flour mills are struggling to obtain sufficient supplies in the market," said a New Delhi-based trader.
Wheat prices at Indore in the central State of Madhya Pradesh rose by 1.5% on Tuesday to ₹25,446 ($307.33) per metric ton, the highest since February 10. Prices have surged by nearly 18% over the past four months.
The government should release stocks from its warehouses into the open market to avoid potential shortages during the festive season, said a Mumbai-based dealer associated with a global trade house.
As of August 1, wheat stocks in government warehouses stood at 28.3 million metric tonne, an increase from the 26.6 million metric tonne recorded a year earlier.