Due to increased demand for major holidays, tight supply, and the fact that import taxes prevent domestic flour mills from purchasing wheat abroad, Indian wheat prices soared to an eight-month high on Tuesday. In order to boost supplies and regulate prices in front of crucial state assembly elections and a general election next year, the administration may decide to remove import duties and release more stocks from storage for the cereal. Food inflation may be influenced by rising wheat prices.
The cost of a metric tone of wheat in New Delhi increased by 1.6% on Tuesday to 27,390 rupees ($329), the highest price since February 10. Over the previous six months, prices have increased by roughly 22%. Wheat prices are rising as a result of holiday demand.
24 million metric tones of wheat were in government warehouses as of October 1; this is much less than the five-year average of 37.6 million tones. Against a goal of 34.15 million tones, India was able to purchase 26.2 million tones of wheat from farmers in 2023.
Although the government projects that wheat production would reach a record high of 112.74 million metric tones in 2023, a major trade organization claims that the actual crop will be at least 10% lower. According to a Mumbai-based dealer with a global trade business, “the supply situation is poised to tighten further in the coming months, and there is a real risk of prices surging beyond 30,000 rupees unless the government opens the door to imports.”
