Source: Ukragroconsult (Ukraine)
India’s flour mills are struggling to secure enough wheat to operate at full capacity to meet strong demand amid tight supplies and record high grain prices, Reuters reported, citing industry sources.
In December, the government lowered the limit on wheat stocks that traders and flour millers can hold in an attempt to boost grain availability and moderate prices.
The restrictions failed to bring down prices, which traded around 33,000 rupees ($384.66) a ton in New Delhi, down from 24,500 rupees in April and well above the government’s minimum support price of 22,750 rupees for last season’s crop.
“Wheat supplies are tight in the market,” Ajay Goyal, managing director of Shivaji Roller Flour Mills, told Reuters. “Even after paying record prices, flour mills are unable to secure enough to operate at full capacity.”
The government initially imposed wheat stock limits in June on retailers, wholesalers, traders and processors till March 31, 2025, to prevent wheat hoarding and discourage price speculation. The limits were lowered in September before additional measures in December.
Persistent high prices despite the limits indicate that private players have few stocks and the government will have to sell more wheat from its reserves to wholesale consumers, another flour miller said.
According to a November report, government wheat stocks as of Oct. 1 were estimated at 23.8 million tons, compared with 24 million tons for the same period in 2023.
Final stocks for 2024-2025 are projected at 7.5 million tons, according to FAS, due to a likely higher withdrawal of government wheat under market intervention programs if imports at lower duties are not allowed.
According to FAS, wheat allocations under various food security programs are estimated to be about 8-9 million tons for the remainder of the marketing year (October 2024-March 2025), with another 7 million tons of wheat scheduled to be sold to private flour millers under the government’s market intervention program.