New Delhi last week lowered the limit of wheat stocks that traders, and millers can hold, to help boost the grain’s availability and moderate prices that are near their highest level in nearly 10 months.
But the curbs failed to bring down prices, which were trading at 28,416 rupees ($339.53) per metric ton in New Delhi, up from 24,000 rupees in April.
The market is awaiting the government to begin auctioning wheat to private players as demand is set to rise next month due to festivals amidst limited supplies, said Ajay Goyal, managing director of Shivaji Roller Flour Mills.
India will celebrate Dussehra in October and Diwali in November, when wheat demand usually rises.
“Wheat prices might go up by another 2-3% if the government pushes the sale to next month,” Goyal said on the sidelines of an industry event. India initially planned to sell wheat from its state reserves to bulk consumers from July, but this was delayed and there has been no subsequent update on its plans. Last year the government started selling wheat from its reserves in June, and between June 2023 and March 2024 it sold a record amount of nearly 10 million tons from stocks.
That helped bulk buyers such as flour millers and biscuit makers to secure supplies of the staple at affordable costs.
“Due to limited surplus with the government this year, it is reluctant to release large quantity of its wheat stocks in 2024. It aims to maintain sufficient reserves for the first quarter of 2025,” said a New Delhi based trader with a global trade house.
Wheat stocks in India’s government warehouses on Sept. 1 were 25.1 million tons, down 3.5% from a year ago.