India doubles wheat sales from state reserves amid rising prices

The Indian government has nearly doubled the volume of wheat offered in the weekly auction from state reserves scheduled for November 4. The move comes amid rising domestic prices and dwindling stocks. A total of 199 thsd tons of wheat will be offered, compared with 101 thsd tons at the previous auction on October 28.

At the previous auction, the Food Corporation of India (FCI) sold 99,316 tons of wheat, or 98.3% of the volume offered. Several states, including Punjab, Haryana and Uttar Pradesh, reported a 100% offtake, indicating strong demand for government-held wheat.

The largest increase in supply is planned for Punjab, where the volume offered will rise from 25 thsd to 44 thsd tons. Haryana’s allocation has increased from 12 thsd to 23 thsd tons, Uttar Pradesh’s from 8 thsd to 14 thsd tons, and Madhya Pradesh’s from 6 thsd to 10 thsd tons. Traders remain barred from participating in the auctions.

Despite the increase in sales volumes, experts doubt the move will significantly curb price increases. The maximum quantity of wheat that a single bidder can purchase at each weekly auction remains unchanged. This limits the potential for higher purchases even as the overall supply of government-held wheat increases.

Tags: prices, wheat, India