Wheat prices in retail market have gone up by 11 per cent and atta by 16 per cent since January this year and there is no sign of any cooling off until the next crop arrives in March-April. While flour millers have sought some quantity be released from the official stock, the government is yet to make up its mind, leading to more speculation in the market.

“We have asked the Food Ministry for release of 3-4 million tonnes (mt) of wheat in the open market,” said Pramod Kumar, President of Roller Flour Millers’ Federation of India. While there is a demand from the flour millers, the availability is only one-third, Kumar said adding that is the reason prices are moving each day in wholesale.

Sellers reluctant

A Bengaluru-based miller who purchased about 100 tonnes last week at about ₹2,900/quintal (mill-gate) was ready to buy at ₹3,000 but did not get any seller. “The sellers, mostly large stockists, are expecting prices to go up further,” he said. While many of the southern mills have wheat until mid-January, the supply in eastern region has already dried up, trade sources said.

As the government has been silent on open market sale, except a rhetoric to release wheat whenever needed, there has been speculation in the market on whether the government is really serious in taming wheat prices.

According to Consumer Affairs Ministry data, all-India average retail prices of the foodgrain was ₹31.13/kg during the first week of this month — up from ₹28 in January. Atta (wheat flour) prices, too, have moved to ₹36.36 a kg from ₹31.30 in January.

Export market

Official sources said that while export price realisation this year (April-September) shows that the global market paid nearly ₹5 per kg extra to buy Indian wheat, compared with the preceding year , domestic retail prices have gone up by about ₹3 a kg in the same period.

Export of wheat jumped 93 per cent to 4.59 million tonnes (mt0 during April-September of current fiscal from 2.38 mt year-ago, as the government had to allow shipments for which contracts were already signed before the ban was made effective from May 13.

“There is no wheat coming to mandis and prices are almost rising every day. Demand is definitely there, but many buyers are hesitant to purchase while millers are under pressure to buy,” said a Hapur-based trader. He said the average quality wheat was available at ₹2,600/quintal on Monday and rates will be known on Wednesday due to Guru Parab holiday. Traders are keeping a tab of wheat acreage as they are keen to know how will be the production next year.

Experts said that many flour millers had depended on supplies from the PMGKAY grain which was getting recycled and available cheaper. But, the supply got affected after wheat allocation was cut due to lower procurement in April-May. The government had bought just 19 mt wheat against a target of 44.4 mt.