Wheat Prices Stay High as Government Ends Open Market Sales by Amit Gupta, Kedia Advisory
The Indian government has ended its open market wheat sales, selling 2.97 million tonnes out of the 3 million tonnes offered under the Open Market Sales Scheme (OMSS). Despite efforts to control prices, wheat rates remain above the Minimum Support Price (MSP) of Rs 2,425/quintal. The last auction saw prices ranging from Rs 2,540 to Rs 3,275 per quintal, with some regions witnessing a decline while others saw an increase. With private traders actively purchasing wheat and procurement challenges ahead, the government faces hurdles in meeting its target of 31 million tonnes for the current season. Market watchers remain skeptical about achieving last year’s procurement levels.
Key Highlights
* Government halts wheat sales after selling 2.97 million tonnes under OMSS.
* Wheat prices remain above MSP despite market interventions.
* Bid prices ranged from Rs 2,540 to Rs 3,275/quintal in different states.
* Private traders expected to intensify wheat purchases.
* Government’s procurement target of 31 million tonnes faces challenges.
The Indian government has concluded its open market wheat sales, which were initiated in December 2024 to stabilize prices. Under the Open Market Sales Scheme (OMSS), the Food Corporation of India (FCI) sold 2.97 million tonnes out of the 3 million tonnes offered, significantly lower than last year’s 10 million tonnes. Despite these efforts, wheat prices remain high, ruling above the MSP of Rs 2,425/quintal.
The last auction on March 5 saw varied price trends across states. In wheat-producing regions, bid prices ranged between Rs 2,540 and Rs 3,009 per quintal, with Jammu and Kashmir seeing the highest at Rs 3,275/quintal. Some states, such as Haryana, witnessed a steep drop of Rs 570/quintal, while in Punjab and Bihar, the decline was marginal. Despite this, the average selling price in OMSS auctions dropped from Rs 2,885/quintal in the first round to Rs 2,712/quintal in the last.
With private traders actively purchasing wheat, the government now faces procurement challenges. The Centre has set a procurement target of 31 million tonnes for the current season, compared to last year’s 26.61 million tonnes. However, meeting this target appears difficult, as private trade is expected to absorb a large share of the new crop. The government hopes that bonus incentives in Madhya Pradesh and Rajasthan will boost procurement, but experts remain doubtful.
Finally
The government’s wheat market interventions have had limited impact on prices, and procurement challenges remain. With private trade active, achieving the procurement target will be a tough task this season.
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