Wheat Prices Jump To 6-Month High Due To Limited Supply, Robust Demand

Mumbai:

Wheat costs in India surged to a six-month excessive on Tuesday because of restricted provides and sturdy demand forward of the competition season, sellers mentioned.

The growing costs might immediate Centre to remove import duties on the cereal to bolster provides and management costs forward of key state polls and subsequent yr’s normal election.

Rising wheat costs may contribute to meals inflation and probably complicate the efforts of each the federal government and the central financial institution to include inflation.

“In all key producing states, farmer provides have almost come to a halt. Flour mills are struggling to acquire enough provides available in the market,” mentioned a New Delhi-based dealer.

Wheat costs at Indore within the central state of Madhya Pradesh rose by 1.5% on Tuesday to 25,446 rupees ($307.33) per metric ton, the best since Feb. 10. Costs have surged by almost 18% over the previous 4 months.

The federal government ought to launch shares from its warehouses into the open market to keep away from potential shortages through the festive season, mentioned a Mumbai-based vendor related to a world commerce home.

As of August 1, wheat shares in authorities warehouses stood at 28.3 million metric tons, a rise from the 26.6 million metric tons recorded a yr earlier.

“Imports are essential to decrease costs. The federal government can’t improve provides with out imports,” the vendor mentioned.

India is contemplating chopping and even abolishing a 40% import tax on wheat and decreasing a restrict on the quantity of wheat shares millers and merchants can maintain, Sanjeev Chopra, essentially the most senior civil servant on the federal meals ministry, mentioned final week.

Wheat output rose to a report 112.74 million metric tons in 2023, up from 107.7 million metric tons a yr earlier, based on the Ministry of Agriculture & Farmers Welfare.

India consumes round 108 million metric tons of wheat yearly.

However a number one commerce physique instructed Reuters in June that India’s wheat harvest in 2023 was at the very least 10% decrease than the farm ministry’s estimate.

(Aside from the headline, this story has not been edited by NDTV workers and is revealed from a syndicated feed.)