Modi government plans to release wheat from its buffer stock to cool soaring prices

By R. Suryamurthy

The government plans to release wheat from its buffer stock to bulk buyers such as flour mills to cool soaring prices.

Wheat prices have hit a nine-month high of ₹28,000 per metric tonne, up from ₹24,000 in April. The government is concerned about rising demand during the festival season.

“As the demand for grains and other food items goes up during the festival season beginning September to December, the government would be keeping a close watch on the situation and intervene in the markets,” said a government official.

The period September to December has several wedding days besides a string of festivals such as Dussehra, Durga Puja and Diwali that are likely to lift consumer demand after tepid sales in the first half of calendar year 2024.

“After meeting the requirements of the public distribution system and other welfare schemes, there will be sufficient stocks of wheat available for market interventions,” said another official.

Last year, the Food Corporation of India (FCI) conducted open market sales of wheat and sold a record 10 million tonnes.

Wheat stocks in government warehouses on August 1 stood at 26.8 million tonnes, down 4.4 per cent from a year ago.

The government is also monitoring the supply of pulses, especially tur and chana dal, ahead of the festival season. Chana prices have increased 10 per cent in the last three weeks.

“The Department of Consumer Affairs held a review meeting with stakeholders of the pulses industry to discuss measures to control chana dal prices, which have risen 37 per cent since January,” said a government official.

Rising food prices have contributed to India’s headline inflation exceeding the central bank’s target of 4 per cent. The Reserve Bank of India (RBI) has maintained a restrictive monetary policy stance in response.

This article has been republished from The Telegraph.