Reuters – India will provide three million tonnes of wheat to bulk consumers such as flour millers. The move is part of efforts to bring down prices, which jumped to a record high Jan. 25, a government official told Reuters.
The allocation is more than traders’ expectations of around two million tonnes. The market waited for government permission for nearly two months as demand surged and supplies dwindled at the tail end of the wheat-marketing year.
“There’s this consensus that bulk users will be allowed to buy up to three million tonnes of wheat from government stocks,” the official said.
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Wheat prices in India, the world’s biggest consumer of the grain, are scaling new peaks as farmers and traders run out of stock.
Jan. 25 wheat prices in the Indore market jumped to a record C$487.80 per tonne. They had already risen nine per cent since the start of the month, after a 37 per cent jump in 2022.
India banned exports in May 2022 after a sudden rise in temperatures clipped output, even as exports picked up to meet the global shortfall triggered by Russia’s invasion of Ukraine.
Traders say record-high wheat prices, despite the export ban, indicate a far bigger drop in last year’s output.
According to government estimates, wheat output fell to 106.84 million tonnes in 2022 from 109.59 million tonnes a year earlier.
