IGI Logo

Wheat prices in India are nearing record levels due to tight supplies, driven by the government’s delay in launching the Open Market Sale Scheme (OMSS) and reluctance to reduce import duties. Currently, wheat is trading as high as Rs.3,400 per tonne, pressuring flour mills and sparking calls for imports or OMSS activation. Industry sources report that stocks are mainly held by private players, as government supplies are limited. Retail prices have risen by 2.2% in the last month, with further inflation feared due to supply shortfalls as rabi sowing begins, leaving stakeholders concerned about immediate solutions.

Key Highlights

* Wheat prices touch near-record highs at Rs.34,000 per tonne.

* Flour mills demand immediate OMSS launch or import duty cuts.

* Government focuses on PDS over OMSS to manage stock distribution.

* Limited wheat supply from private stockists further escalates prices.

* Industry warns of continued price inflation until the next crop season.

Wheat prices across India are climbing near record highs, now at Rs.34,000 per tonne for deliveries in the South, as supply bottlenecks continue to strain the market. Flour mills are calling on the government to either launch the Open Market Sale Scheme (OMSS) this fiscal year or reduce import duties to alleviate the shortage. The government, however, has yet to initiate OMSS, focusing instead on distributing stock through the Public Distribution System (PDS). Consequently, private stockists hold most of the supply, leading to price escalations that see wheat at Rs.3,200 per quintal in Delhi and further rising across other regions.

Industry insiders attribute the price surge to restricted availability, with wheat accessible primarily in Uttar Pradesh and not in other major producing states like Rajasthan, Madhya Pradesh, or Punjab. Data from Agmarket shows the current average market price at Rs.2,811 per quintal, above this year's minimum support price of Rs.2,275, while retail rates have risen by 2.2% in the last month and 4.44% over the past year, now averaging Rs.31.98 per kilogram.

Beyond price hikes, stakeholders fear that India’s reluctance to permit imports, citing concerns over the current rabi sowing season, could lead to continued supply issues until the next harvest. Global prices for wheat remain low, presenting an opportune moment for imports, but the government may delay action until domestic crops stabilize. Meanwhile, Algeria’s recent import from the Black Sea region at $263 per tonne demonstrates an alternative strategy amid similar conditions.

Finally

With five months until the next crop, India faces a critical wheat shortage, prompting urgent industry calls for OMSS activation or reduced import duties to mitigate further price surges.

Above views are of the author and not of the website kindly read disclaimer