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Informist, Thursday, Jun. 12, 2025

 

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--Wheat Pdt Society:See FY26 wheat open mkt sale reserve price near INR 25/kg
--CONTEXT: Wheat Pdts Society Chairman Goyal in interview with Informist
--Wheat Pdt Society: See 2024-25 wheat output 109 mln-110 mln tn, up 4-5%
--Wheat Pdt Society: Govt comfortable selling 8-10 mln tn wheat in open mkt
--Wheat Pdt Society Goyal: Expect FY26 wheat open mkt sales to begin July
--Wheat Pdt Society: Wheat price may not hit peak of INR 3,350/100 kg FY26
--Wheat Pdt Society Goyal: Bihar wheat farmers may move to rabi corn this yr
--Wheat Pdt Society Goyal: Govt may not allow wheat, wheat pdt export FY26

 

By J. Navya Sruthi and Shreya Shetty

 

MUMBAI – The reserve price of wheat under the open market sales scheme in 2025-26 (Apr-Mar) is expected to be around INR 2,475-INR 2,500 per 100 kg, according to Ajay Goyal, chairman of the Wheat Products Promotion Society. It is likely that the government will start offloading wheat in July and is comfortably placed to allocate up to 8 million-10 million tonnes of grain under open market sales this year, Goyal told Informist in an interview.

 

With a 4-5% on year rise in wheat production in 2024-25 (Jul-Jun), prices of the staple grain are unlikely to hit the record price of INR 3,350 per 100 kg seen in Delhi market in January, Goyal said. He pegs the wheat output for 2024-25 at 109 million to 110 million tonnes, against the estimate of 105 million tonnes in 2023-24. The government has pegged wheat output at 117.5 million tonnes, nearly 4% higher than 113.3 million tonnes seen in the previous year. 

 

Commenting on wheat exports, Goyal said the government was "very scared of allowing exports", amid fear about a surge in domestic prices. So, it is unlikely that the government will allow exports of wheat or wheat products. Wheat exports were banned in May 2022 to ensure domestic availability and check any rise in prices. This was followed by a ban on wheat product exports in August that year.

 

The following are edited excerpts from the interview:

 

Q. What is your estimate for wheat production in 2024-25? Has the government overestimated the number?

A. No, this year everybody is in tandem that wheat production is 4-5% higher than last year. The base number of previous year can be different. But irrespective of your base number, this year the production is definitely 4-5% higher in terms of yield and slightly higher acreage. We would peg 2024-25 (Jul-Jun) wheat production at 109 million-110 million tonnes.

 

Q. Do you think the wheat market needs open market sales, although there are stock limits on traders?

A. Somebody has to keep feeding the market till next March. (This requires) farmer to bring wheat round the year but farmer has sold bulk of his wheat in the first two months. So, he (farmer) hardly has anything. The second are traders who are stocking and trading round the year. Now their hands and legs are tied, so they are not going to be everyday participants easily in the market. Third, millers themselves with their own stocks, but millers normally stock for the lean months of December, January, and February.

 

So, right now it is only the government who has the stocks. Also you must understand the government has so much of rice, so much of wheat. What are they going to do with so much?

 

Q. According to you, how much wheat should the government offload this time?

A. The government is comfortable to offload up to 8 million-10 million tonnes. Now, the point is whether it will try to offload in smaller tranches and with smaller limits to each user in the first three months and then step it up gradually. Or let go of everything from day one, wherein there will be higher limits and higher allocation.

 

Q. In FY25, the reserve price for wheat under the open market sales scheme was INR 2,325 per 100 kg. Where do you see the reserve price in FY26?

A. The markets expect reserve price at INR 2,475-INR 2,500 per 100 kg.

 

Q. When are you expecting wheat open market sales to begin this year?

A. I expect it to begin in July.

 

Q. Last year the highest average selling price was INR 3,031.6 per 100 kg. Do you see that repeating this year?

A. Suppose there are 40 bidders in one location and the government is only allocating (wheat) which is good enough for 15-20 bidders. Then there is a mismatch of demand and supply. It is in such places that these aberrations happen.

 

Q. Even though the government imposed stock limits, prices have not fallen sharply. Do you think the government will tighten stock limits further?

A. It will be very unfortunate if the government tinkers more with this policy of stock limits. The government needs to provide liquidity in any market place. There have to be enough buyers and enough sellers with such a huge crop of over 100 million tonnes. If you are not going to provide liquidity in that crop, then slowly private money will move out of this trade.

 

The government is not there to stand and buy every grain that comes into the market. It is the private trade that is doing it day-in, day-out for all the crops. And if the government is so touchy about wheat, let them say that trade shouldn't buy it only. These sorts of limits are regressive. This year the government has 30 million tonnes of wheat. I don't know what fear is gripping the government.

 

Q. Do you see wheat prices rising to the record high seen in January? Do you see the high levels as a new normal?

A. Wheat is harvested in March, April, and May. And by the time January comes, we have almost the lowest level of stock, and demand is also high then. So, if the supply lines are not open, then these aberrations happen. So, January is the reversal month, when everybody starts unwinding their positions, because of which January becomes crucial.

 

As far as INR 30-INR 33 (per kg) is concerned, it is the government that has been increasing the procurement price year after year with so much of bonus. These are the prices which the government desires. No consumer or miller is wanting to pay higher price for his raw material because passing them on is a big challenge always.

 

Q. Do you see any effect on bakers or other end-users because of high wheat prices this year too?

A. This year there should not be a major change because most people (bakers) have taken a decent price rise last year. This year prices are not expected to cross last year's highs.

 

Q. With enough wheat this year, can we expect the government to allow exports of wheat products? 

A. Government is very scared of allowing exports as it feels that local market prices will shoot up. So, the government is not in favour of allowing exports of any kind of wheat products, wheat atta or anything.

 

Q. Is there any reason why the government is not able to meet its revised procurement target of 33 million tonnes?

A. So, Uttar Pradesh was a total no-show. See, it is not easy just by expressing intention of procurement. You can't have a neighbouring state giving bonus and then expect the Uttar Pradesh farmers to give it without the bonus. If the government would have declared a bonus in Uttar Pradesh, I am sure the government would have procured much more than what it has procured.

 

(Rajasthan and Madhya Pradesh governments announced bonus of INR 150 and INR 175, respectively, over the minimum support price of INR 2,425 per 100 kg in FY26. This has boosted the Centre's procurement to 29.7 million tonnes so far, against 26.6 million tonnes in FY25.) 

 

Q. Last year, farmers in Uttar Pradesh held back from selling their wheat crop. Do you see it happening this year as well?

A. Yes, Uttar Pradesh farmers will continue to hold back. Probably in October or November (they will sell), when the new crop starts sowing. They could align themselves with some local money lenders or something and hold it longer and share profits.

 

Q. Do you expect farmers to shift to maize from wheat, amid better returns, in the upcoming rabi season starting in October?

A. You could see that in Bihar probably. Certain geographies, you could see that happening probably. Not a shift but little higher acreages in those provinces. But I don't see that happening rapidly in the well irrigated areas of Punjab, Haryana or even Uttar Pradesh and all that. Because for ethanol now rice is also giving them a competition.

 

Q. Do you expect farmers to shift to wheat, amid better returns, in the upcoming rabi season starting in October?

A. Probably there could be small incremental shift but nothing major.

 

Q. Do you see people shifting from wheat to millets?

A. There won't be any demand shift from wheat to other grains. How can you shift? These are all local grains for local (consumers). I will be surprised if there is (a shift).

End

 

Edited by Akul Nishant Akhoury

 

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