Wheat stocks likely to fall to their lowest since 2016
New Delhi, May 17: The prices of wheat may fall to their lowest level since 2016-17. The government's pwn purchase of the cereal is likely to be the lowest in 15 years.
India had on May 13 said that it was suspending exports of wheat to manage its food security which is at risk. The government however kept a window open for overseas sales should a foreign country make a request.
The staple's off take, which refers to withdrawal for subsidised distribution and open market sales has risen 38 per cent over the last two years, a Hindustan Times report said.
Following this the prices of wheat fell and a further correction is expected in the coming days. Wheat prices were at Rs 2,075 per quintal, down by Rs 80-100 from Friday in the Kota Mandi in Rajasthan.
In the Narela market in Delhi, the price was quoted at Rs 2,200-2,220 a quintal as against 2,300-2,330 a day earlier.
The prices of wheat was on the rise since the commencement the new crop supplies. This was mainly due to more exporters buying and projection of lower production of grain.
Further there is a sudden spike in the global prices of wheat due to the disruption of supplies from Russia and Ukraine due to the war. The two countries contribute to nearly 30 per cent of the global export trade.
Pointing out that retail prices of wheat and wheat flour have risen in the past year by up to 19 per cent, Food Secretary Sudhanshu Pandey on Saturday said the government's decision to ban wheat export is expected to cool down the domestic prices in a week or so.
He said the tight global supply, including a slight fall in wheat output in India, has spiked global prices up sharply. Consequently, the domestic prices of wheat and atta (wheat flour) have also shot up in the last month.
The likely fall in wheat output in India and even in the government's procurement is unlikely to affect the public distribution system (PDS), he said and asserted, "PDS will be run smoothly."
On Friday, the Commerce Ministry imposed a ban on wheat export with immediate effect. However, it has allowed wheat shipments with valid irrevocable letters of credit (LoC) issued on or before the date of the notification.
The country has contracted for the export of 4.5 million tonnes of wheat so far this fiscal. Out of which, 1.46 million tonnes was exported in April, as per the official data.
The Food Secretary, while addressing a press conference along with his Commerce and Agriculture counterpart, said, "Global demand was rising and different countries were putting restrictions.
Sentiments were driving prices. We are quite confident, now also the sentiments will push down the prices."
These days in several areas, inflation is imported along with the global prices. And this was happening in the case of wheat also. International wheat prices have been going up. Wheat from other countries was selling as high as USD 420-480 per tonne, he said.