Record wheat harvest fails to curb rising prices in India

Despite a record wheat harvest, India’s domestic market is facing limited grain availability and high procurement prices. The government has reduced the volume of wheat offered at its next auction, scheduled for October 28, by 5 thsd tons to 101 thsd tons. Meanwhile, flour mills in several states are willing to pay more than INR 3,100 per quintal (INR 31 thsd/t), compared with the national average wholesale wheat price of around INR 2,910 per quintal (INR 29.1 thsd/t).

The reduction in government wheat sales has raised concerns among processors, which are becoming increasingly dependent on purchases through the Food Corporation of India (FCI) due to limited grain availability on the open market. The cuts are particularly noticeable in Assam, Telangana and Karnataka, where mills purchased almost all the wheat offered at the previous auction. In Assam, the allocation was reduced from 8 to 5 thsd tons, in Telangana from 3.5 to 1 thsd tons, and in Karnataka from 6 to 5 thsd tons.

Flour milling industry representatives are calling on the government to gradually increase wheat volumes offered at weekly auctions and review the mechanism for distributing supplies among regions. According to Dharmendra Jain, President of the Roller Flour Millers’ Federation of India, actual wheat availability on the market has turned out to be lower than expected. In Punjab, where wheat arrivals at wholesale markets have virtually stopped, processors are proposing an increase in weekly government sales from 25 to 40 thsd tons. Meanwhile, some mills are already purchasing wheat at prices exceeding INR 3,000 per quintal.

The situation is unusual given record production and substantial government stocks. India harvested 120.66 mln tons of wheat in the 2025/26 crop year, compared with 117.95 mln tons a year earlier. Government wheat procurement increased to 35.76 mln tons in the MY 2026/27, up from 29.98 mln tons in the previous season. As of September 1, FCI wheat stocks stood at 47.99 mln tons, the highest level for that date in five years.

Despite substantial government reserves, wheat availability for private processors remains limited, supporting high prices in the domestic market. Industry representatives stress that auction volumes should be determined based on the concentration of flour mills and actual demand in individual regions. According to processors, a significant decline in wheat prices is unlikely in the near term unless the government increases grain supplies through its weekly auctions.

Tags: prices, wheat, India