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Informist, Wednesday, May 28, 2025

 

--Govt source: May begin wheat open market sales by early July 

--Govt source: May sell up to 6 mln tn of wheat in open market in 2025-26 

 

By Pallavi Singhal

 

NEW DELHI – The government may start open market sales of wheat by as early as June-end or early July in an attempt to increase supply into the market to control prices, said a government source. The government has the bandwidth to sell at least 6 million tonnes of wheat even if the allocation for public distribution system is increased in 2025-26 (Apr-Mar), the official said.

 

Open market sales aim to augment domestic supply and stabilise prices by releasing wheat from the central pool to bulk buyers such as flour mills and manufacturers.

 

According to the official, while it is too soon to state the exact amount of wheat that will be allocated, the number of auctions, and the reserve price, "it is certain that the government is looking to cool down prices which have been high despite heavy wheat arrivals".

 

Prices of wheat in the key market of Indore in Madhya Pradesh were at INR 2,740 per 100 kg. Prices in the benchmark market of Delhi were at INR 2,770 per 100 kg, traders said. This is significantly above the minimum support price of INR 2,425 per 100 kg. 

 

According to the official, with 30 million tonnes of procurement this season and an opening stock of 11 million tonnes, the government will have about 6 million tonnes left to sell if the allocation for the public distribution system is increased. 

 

As of last year, about 18.4 million tonnes was allocated to the public distribution system scheme and later, it was increased by 3.5 million tonnes in September. Even if the government increases the allocation by 3 million tonnes this year, the total requirement will be 24.9 million tonnes, the official said. With 24.9 million tonnes towards welfare schemes and 7.5 million tonnes as closing stock, the government will be left with over 8 million tonnes, the official added.

 

The Centre on Wednesday also re-imposed stock limits for the wheat trade entities can stock till the end of this financial year, almost a month ahead of when the stock limits were introduced last year – Jun. 24. 

 

In FY25, the government sold 3 million tonnes of wheat under the open market sales scheme with a reserve price of INR 2,325 per 100 kg. In FY24, wheat sales under the open market scheme were at an all-time high of 9.4 million tonnes. Last year, the reserve price for fair and average quality wheat was 2,150 rupees per 100 kg, and 2,125 rupees for reduced specification wheat.

 

For 2024-25 (Jul-Jun), the government has pegged wheat production at a record high of 115.4 million tonnes, higher than 113.3 million tonnes the previous year. There were also reports about the government raising its estimate for wheat output to 117 million tonnes in its third advance estimate.  End

 

Edited by Avishek Dutta

 

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