Indian wheat prices drop after Modi releases grain for flour millers
Wheat
India
Published Feb 1, 2023
Tridge summary
Wheat prices in India, the world’s biggest consumer of the grain after China, have dropped nearly 13% from record highs since the government offer last week of 3 million tonnes to bulk consumers such as flour millers. On Monday, wheat prices in New Delhi dropped to 28,290 rupees ($347.11) a tonne, down 13% from their record high hit last week because stocks are low. But domestic prices are still higher than the state-set support or guaranteed price of 21,250 rupees.
Original content
The price spike reflects a big drop last year in state purchases of wheat. Every year the government-backed Food Corporation of India (FCI) buys millions of tonnes of wheat at a fixed support price to build the reserves needed to run the world’s biggest food welfare programme. FCI also buys wheat from local farmers to build strategic reserves to deal with emergencies such as droughts. Last year, FCI’s purchases of wheat fell by 53% to 18.8 million tonnes, as open market prices stayed above the rate at which the government buys the staple from domestic farmers. “We do not want FCI’s procurement to drop this year and that is why we have released 3 million tonnes of wheat,” said a government source who did not wish to be identified. “If prices drop, FCI will be able to buy reasonably sufficient quantities of wheat from farmers,” said the official with direct knowledge of the matter. “The ...
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