Growing concern about wheat
18-Jan-2025 01:51 PM
The situation regarding wheat prices in India is becoming increasingly concerning, despite the government's efforts to control prices. Several factors are contributing to this issue, and it highlights challenges both in supply and government interventions.
High Prices and Limited Stock: Even with government measures like increasing wheat auctions under the Open Market Sale Scheme (OMSS), the wholesale price of wheat remains high. The limited availability of wheat in the market, especially during the lean season (November to March), contributes to price increases. The government's stock is insufficient to intervene effectively in the market, which causes volatility.
Demand-Supply Mismatch: India has a large population, and wheat is a staple food for many. With a growing demand and limited supply, the price of wheat tends to rise. This imbalance is exacerbated by the fact that there is little wheat available from farmers and traders, despite the government's restrictions on exports and storage.
Government Procurement: While the government is increasing the procurement target for the current Rabi season to 300 lakh tonnes, there are challenges in achieving this target, particularly in states outside of Punjab and Haryana. The underperformance in procurement in states like Uttar Pradesh, Rajasthan, Bihar, and Gujarat could further strain supply and affect prices.
Favorable Weather Conditions: On a more positive note, the current Rabi season shows promise, with an increase in sowing area (320 lakh hectares) and favorable weather conditions. This could lead to an improvement in production. However, despite this optimism, achieving the procurement target remains a significant challenge.
In summary, while efforts are being made to increase the availability of wheat through government interventions, the high demand, limited stock, and challenges in procurement are making it difficult to stabilize prices. It is essential for the government to address these issues in order to ensure that wheat remains accessible and affordable for the population.