Possible Reasons for Wheat Stock Limit and Upcoming OMSS Sale

30-May-2025 10:25 AM

Possible Reasons for Wheat Stock Limit and Upcoming OMSS Sale
★ On 28 May 2025, a stock limit was imposed on wheat, which surprised the market.
However, the limit is not too low as traders and flour mills usually do not hold more than this quantity. Prices have remained stable due to good demand.
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For example, in Delhi:
★ On 27 May 2025, mill-quality wheat was traded at ₹2755 per quintal.
★ On 28 May 2025, it traded at ₹2760 per quintal (mill).
★ On 29 May 2025, mill rate was ₹2755.
★ Despite the stock limit, there has been no significant fall in prices.
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Wheat Sale Under OMSS Likely by July 2025: Key Reasons
★ Prices are rising, prompting the government to prepare for market intervention.
★ FCI now has adequate wheat stocks, enabling it to manage supply effectively.
★ Private sector also holds comfortable stock levels. To increase availability in the open market, the stock limit was imposed.
★ The government is distributing three months’ ration in advance, putting pressure on storage and supply systems.
★ There is an oversupply of rice in the central pool, reducing storage space for wheat.
★ Two years ago, 100 lakh tonnes of wheat were sold under OMSS, compared to only 35 lakh tonnes last season, resulting in lower stocks with flour mills.
★ Around 70 lakh tonnes of wheat could be offered under OMSS this season.
★ As shown by I-Grain India through historical charts, stock limits have been changed in previous years and may be revised again.
★ If there is a sharp increase in prices, the government is now well-positioned to intervene regularly. Unlike the past two years, it has sufficient stock to regulate the market.