The government has sufficient stock to control the prices of wheat in the off season of supply

09-May-2025 04:18 PM

New Delhi. On April 1, 2025, the central pool held a stock of approximately 118.70 lakh tonnes of wheat. In the current Rabi marketing season, over 280 lakh tonnes of wheat have already been procured, resulting in a significant increase in total stock. Last year, the total wheat procurement stood at 266 lakh tonnes. This year, procurement is still ongoing.

The government has raised its procurement target by 20 lakh tonnes—from 312.70 lakh tonnes to 332.70 lakh tonnes. This increase primarily applies to Madhya Pradesh, where farmers are actively bringing their wheat to procurement centres due to an attractive price of Rs 2600 per quintal.

Notably, private firms along with government agencies are also purchasing wheat successfully. These include large companies, flour millers, processors, and stockists. As a result, supply and availability of wheat in the coming months are expected to remain stable.

This will have two benefits: first, it will reduce the likelihood of a sharp rise in wheat prices in the open market; second, the government may not need to release wheat from its stock under the Open Market Sale Scheme (OMSS) urgently.

However, the peak supply season will conclude next month, and there may be a slight rise in prices thereafter. Even so, a steep price surge that would require the imposition of stock limits seems unlikely.

Wheat procurement by the government continues in Punjab and Haryana until May 15, while in Madhya Pradesh, Uttar Pradesh, Rajasthan, Bihar, and Gujarat, procurement can continue from May 31 to June 30.

If total government procurement exceeds 300 lakh tonnes, the government will be well-positioned to intervene in the open market and ensure adequate supply through welfare schemes.