Wheat prices remain strong despite sales in OMSS

29-Jan-2025 01:43 PM

The wheat market in India is definitely under some pressure, even with the government's efforts to manage prices through the Open Market Sale Scheme (OMSS).

The Food Corporation of India (FCI) selling large quantities from its reserves over the past few months has had some effect in curbing price hikes, but it seems the current supply measures aren't enough to bring prices down significantly.

A key issue is the persistent high demand and low spot stock, which makes it difficult for prices to soften despite global supply being easier.

The jump in wheat prices to over Rs 3300 per quintal, well above the Minimum Support Price (MSP), shows the disconnect between the government-set floor price and actual market conditions.

It's also interesting that the government has allocated a smaller quantity (30 lakh tonnes) for sale under OMSS this year compared to the previous year’s one crore tonnes.

This smaller volume could limit the impact on overall market prices, especially when the stock in the market remains tight.

Even with global wheat prices influencing the market, local supply-and-demand dynamics, especially at a time of strong demand, seem to be driving prices higher.

Do you think the government will increase the quantity for sale again this year, or is the current approach likely to remain?