Wheat prices likely to remain high till sale from central pool begins

13-Nov-2024 09:03 PM

The rise in wheat prices is likely to persist until the government starts releasing wheat from its central pool, a move that has been postponed for now.

The decrease in wheat arrivals and the ongoing strong demand—both for food and for sowing—have contributed to the price hike.

Despite claims that traders and stockists have sufficient stocks (around 90 lakh tonnes), the slow pace of supply has created a tight market and led to higher prices.

The government had initially planned to restart the Open Market Sale Scheme (OMSS) in July, which would have involved selling wheat from its central stock to ease the market.

However, this plan has been delayed, leaving millers and processors to source wheat from the open market at rising prices. Last year, the OMSS helped control wheat prices by selling about 100 lakh tonnes of wheat from government stocks.

The current high prices, though concerning for consumers, could have a silver lining: they may encourage farmers to expand their wheat sowing areas in the next season, helping to stabilize supply in the long term.

Until the government intervenes with wheat sales, though, it seems likely that prices will remain elevated.