Wheat prices increased by more than 8 percent during the last fortnight

08-Jan-2025 01:14 PM

The price of wheat has been steadily rising in India, experiencing an increase of over 8% in the past two weeks.

The current price stands at Rs 3200-3300 per quintal, which is close to the record high seen two years ago.

This surge is largely driven by limited supply in the market and strong demand from millers and processors.

While the government has been selling wheat through its Open Market Sale Scheme (OMSS), the quantity available is insufficient to meet the demand, which is pushing the prices higher in the open market.

Moreover, government wheat is also being purchased at prices up to Rs 600 per quintal higher than the minimum reserve price, further adding to the upward pressure on market prices.

Although some relief may come from the government's weekly auction of wheat (about 100,000 tonnes), with nearly all of it being purchased, there is limited expectation that this will significantly reduce the price, as the total stock available is not sufficient to stabilize the market.

Despite this, experts like Rahul Chauhan, Director of I Grain India, suggest that better wheat production is expected due to favorable weather and an increase in sowing area.

This may improve the supply situation in the coming months. However, with the government's wheat stock limited and demand high, prices are likely to remain elevated until the arrival of the new crop, expected later in the year.