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Informist, Thursday, Jul. 31, 2025

By J. Navya Sruthi

MUMBAI – With sufficient wheat stocks available in the domestic market, market participants agree with the food secretary's statement on no immediate need for open market sales of the staple grain. Although prices have risen for the last five trading days following the secretary's statement, market participants expect wheat prices to remain range-bound with a slight positive bias. They say it is very unlikely that wheat prices will hit INR 3,000 per 100 kg anytime soon.   

There is no dire requirement for the government's wheat sales as big institutional buyers have higher wheat stocks in the current year compared to the last, a senior executive from one of the country's top fast-moving consumer goods company said. "There is no concern with supply-demand fundamentals this year due to higher production and so, it is unlikely for wheat prices in Delhi to rise to INR 3,000 per 100 kg level," said Ajay Goyal, chairman of Wheat Products Promotion Society.

The official from the fast-moving consumer goods company said, "There is no chance for Delhi wheat prices to cross INR 30/kg till October," due to sufficient stocks at warehouses, thanks to higher production. The Centre has pegged 2024-25 (Jul-Jun) wheat output at 117.5 million tonnes, up 4% on year.

Although wheat prices were on an uptrend for the last five trading days, prices are likely to be in a range of INR 28.25-INR 28.80/kg in Delhi, Goyal said. "The recent rally in wheat prices was completely news-based, and it is unlikely to prevail", Goyal said. He added that wheat prices will remain steady for the whole of August. Prices of wheat in Delhi, the benchmark market, were at INR 2,880 per 100 kg Wednesday, up INR 110 per 100 kg from Friday.

Last week, Food Secretary Sanjeev Chopra had said the government saw no immediate requirement to start open market sales of wheat in 2025-26 (Apr-Mar) as prices were largely stable, and the market had adequate supply of the food grain. The top official from the fast-moving consumer goods company said the government would start wheat sales only when Delhi wheat prices cross the INR 30/kg level. 

According to data from the consumer affairs department, the all-India average wholesale wheat price Wednesday was INR 2,824.39 per 100 kg, up INR 7.27 from INR 2,817.12 per 100 kg a month ago. On a yearly basis, prices were nearly 2% higher from INR 2,791.35 per 100 kg. Meanwhile, wheat prices in the Delhi market are up over 8% on year. Experts said 6% of the total on-year rise is due to the increase in the minimum support price to INR 2,425 per 100 kg for FY26.   

The government typically begins wheat sales in the open market in July or August. The government has set a reserve price of INR 2,550 per 100 kg for wheat open market sales in rabi marketing year 2025-26.  

In FY25, the government sold only 3 million tonnes of wheat under the open market sales scheme as it prioritised rebuilding its stock reserves. The reserve price was INR 2,325 per 100 kg. In FY24, the government sold 9.4 million tonnes of wheat, an all-time high, under the scheme to check prices in view of General Elections. The reserve price for fair and average quality wheat in FY24 was INR 2,150 per 100 kg, and INR 2,125 for reduced-specification wheat.

Unlike the last two years, the government's wheat purchases this year are 30.1 million tonnes, higher than the 26.6 million tonnes procured in FY25. However, the government's wheat procurement is short of its revised target of 33.3 million tonnes for FY26. 

As of Jul. 1, wheat stocks with Food Corp. of India were down nearly 3% on month, but at a four-year high of 35.9 million tonnes, up 27% on year. Current wheat stocks are well above the buffer norm of 27.58 million tonnes--operational stock of 24.58 million tonnes and strategic reserve of 3.00 million tonnes.

A few market participants, however, have counter views, expecting wheat prices in Delhi to rise to INR 30 per kg in August if the government does not start open market sales. Even though big institutional players have enough wheat stocks, arrivals in the market are decreasing with firm demand due to the festival season ahead, said Gaurav Kochar, a local trader from Ashok Nagar in Madhya Pradesh. Usually, wheat arrivals in the domestic markets fall from mid-June as farmers get busy with sowing kharif crops.  End

Edited by Avishek Dutta

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