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Informist, Thursday, Dec. 18, 2025

 

By Pallavi Singhal

 

NEW DELHI – India's wheat output in the coming marketing year is likely to rise by at least 5 million tonnes on the back of higher acreage and improved yields. This could raise the risk of a glut, which could push prices below the minimum support price and force the government to sharply step up procurement and consider opening up exports, traders and analysts said.

 

Industry participants see wheat production in the crop year 2025–26 (Jul–Jun) crossing 122 million tonnes, compared with 117.5 million tonnes in the previous year. This is at a time when private trade already holds large stocks and demand from mills remains subdued, limiting the industry's ability to absorb fresh arrivals once harvesting begins.

 

"We see prices crashing next year on robust output plus carryover stocks," said the head of grains operations at an international trading agency. "Government carryover (stock) could be around 20 million tonnes, and it will have to procure at least 30 million tonnes, possibly more," he said, adding that wheat prices are likely to slide below the minimum support price if exports are not opened up.

 

For the 2025–26 rabi marketing season, the Indian government has fixed the minimum support price for wheat at INR 2,425 per 100 kg, up INR 150 from the previous season. Currently, wheat prices in the key market of Indore, Madhya Pradesh, are hovering at INR 2,725 per 100 kg.

 

"Wheat output is seen rising by 5–6 million tonnes this year on higher soil moisture, colder temperatures that boost grain size, and increased sowing," the trader mentioned above said. "This could force the government to open wheat exports," he added. India restricted exports of wheat as well as all wheat products in May 2022 after an early heatwave affected output.

 

"Exports of wheat products are already needed to support market sentiment, but their impact may be limited as global prices are very low, at around $220 a tonne free on board, " he said.

 

HIGH PRIVATE STOCKS

Market participants estimate wheat stored in private warehouses across India at 2.25 million tonnes to 2.50 million tonnes, compared with around 1.00 million tonnes same time last year, which reflects ample supplies and weak offtake.

 

"With private players already holding 2.25–2.5 million tonnes in warehouses, they are unlikely to buy aggressively during peak arrivals," said Amit Mundawala, co-founder, Agribazaar. "The government may have to procure 35–40 million tonnes. Stock limits need to be removed and wheat product exports are likely to be allowed soon," he said.

 

"Plants (mills) have been running on their own stocks for at least the last three months, which shows supplies are adequate. Weather is supportive for a good output, but demand creation will be needed--and that can only come via exports," Mundawala added. Large-scale procurement could also increase storage and carrying costs for the government, traders said.

 

CALL TO OPEN EXPORTS

Traders said timely policy intervention will be critical to prevent storage bottlenecks and price pressures once arrivals accelerate from Mar–Apr. "There is a clear rise of at least 5 million tonnes this year. The government should immediately look at opening exports of wheat products," said agriculture economist Deepak Pareek.

 

"If wheat exports are not opened by May, there will be storage issues. I see closing stocks at around 24 million tonnes," he said. "Government procurement may be in the range of 30–35 million tonnes. With global wheat at around $220 (per tonne) free on board, exports will be challenging but necessary," Pareek added.

 

STOCKS COULD RETURN TO 2021 LEVELS

Trade estimates peg government wheat stocks at minimum 20 million tonnes as on Apr. 1, 2026, sharply higher than 11.8 million tonnes on Apr. 1 this year. The last time stocks were this high was on Apr. 1, 2021, when they stood at 27.3 million tonnes.

 

The growing surplus is already visible in weak government sales under the Open Market Sale Scheme. The government recently suspended wheat e-auctions for 2025–26 after selling barely 40% of the quantities offered in earlier auctions. The Food Corp. of India began wheat auctions for 2025–26 on Nov. 12, but shifted from weekly to fortnightly auctions due to poor buying interest from millers and processors amid ample market supplies.

 

"Even after moving to fortnightly auctions, sales struggled to pick up. This shows private trade has more than enough stocks," Pareek said. On Nov. 26, Food Corp. of India sold nearly 80,000 tonnes, or about 40% of the 200,000 tonnes offered, with demand concentrated in Punjab and Haryana, where offtake ranged between 80–100%, while other states saw weak lifting.

 

HIGHER ACREAGE

Data on sowing support expectations of a bumper crop. As of Dec. 12, acreage under wheat -- the largest rabi crop -- was 27.6 million hectares, up 6.6% from 25.8 million hectares in the corresponding period last year.

 

With higher acreage, favourable weather, and large carryover stocks, analysts warn that wheat prices are most likely to fall below the minimum support price unless exports -- at least of wheat products -- are opened up quickly and procurement and storage plans are scaled up.  End

 

Edited by Ashish Shirke

 

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