Starting next month, India will sell wheat from its state reserves to bulk consumers such as flour millers and biscuit makers. This move, outlined in a recent government order, aims to control local prices by increasing wheat supply in the market.
The state-run Food Corporation of India (FCI) has been authorized to offer wheat from its stocks at 23,250 rupees ($279) per ton, which is about 12% lower than current market prices. However, the FCI has not yet determined the exact quantity of wheat it will release for sale. Last fiscal year, FCI sold over 10 million metric tons of wheat to private players, marking a record high.
The reduced price is expected to attract significant interest from private buyers looking to purchase large quantities of wheat. Over the past year, Indian wheat prices have risen nearly 6%, partly due to two consecutive years of poor harvests caused by high temperatures. This year’s wheat crop is 6.25% below the government’s estimate of 112 million metric tons.
Wheat stocks in government warehouses have also decreased, dropping to 29.9 million metric tons as of June 1, compared to 31.4 million metric tons the previous year. To address this shortfall and stabilize prices, India is preparing to import wheat for the first time in six years. Additionally, the government has imposed limits on the amount of wheat that traders can hold and is considering reducing or removing import taxes to facilitate these imports.
These measures reflect India’s efforts to manage its wheat supply and control rising prices, ensuring the availability of this staple food for its population.