Food Secretary Sudhanshu Pandey on Monday said the government will intervene in the domestic wheat market when it thinks there is an abnormal increase in prices. The current price rise is “not abnormal”. Even as retail food inflation is blamed on the high costs of cereals among other items, the government is betting on increased arrivals to cool prices and not rush to offload its stocks in the market.

“The price rise is not abnormal as perceived or projected (by media),” Pandey said when asked if the current increase in wheat and atta (wheat flour) prices is normal. He did not comment on the “abnormal level” that the government has in mind, breaching of which there can be release from the stock held by the Food Corporation of India(FCI).

According to Consumer Affairs Ministry data, all-India average retail wheat prices marginally eased to ₹30.73/kg during October 1-17 from ₹30.84/kg in September. However, atta prices have increased a tad to ₹35.95/kg from ₹35.91/kg during the same period.

Good monsoon

The Food Secretary exuded confidence in normal wheat production and procurement next year due to good monsoon rainfall. “On account of fairly good rainfall in the country, it is expected that wheat production and procurement in the rabi season shall remain normal,” he said in a presentation on the overall situation in wheat and rice.

Even after meeting the additional allocation of PMGKAY VII of 119.62 lakh tonnes (lt) — 21.01 lt of wheat and 98.61 lt rice — as well as the normal requirement under the National Food Security Act (NFSA) and other welfare schemes (OWS), ample stocks will be available in the Central Pool over and above the buffer norms,” Pandey said. As per the government projection, wheat stock as of April 1, 2023 will be 113 lt, which is 51 per cent more than buffer norm of 75 lt.

Pandey said as 70 lt of wheat was sold from the FCI stocks in the open market last year, its prices were stable and did not even reflect the same increase as effected in the minimum support price. He said the retail price of wheat was ₹26.99/kg on October 14, 2021, as against ₹27.73/kg on October 14, 2020.

Large farmers offloading

As arrivals have started increasing, prices may soften, officials said pointing out that large farmers and stockists who had kept the stock in anticipation of further hike in rates have started offloading in tranches.

As reported by businessline , wheat arrivals during August-September were at a 12-year high at 22.7 lt compared with 14.4 lt from the year-ago period.