June 10, 2005

India takes steps against wheat hoarding
 

Indian wheat prices started rising from May due to low summer consumption and concerns on lower output.

According to traders, wheat prices rose to Rs7,600/tonne from around Rs7,200 in mid-May. Prices at the same period last year were only slightly higher than the government's support price of Rs6,400/tonne.

Prices are expected to rise further in winter when demand peaks.

The Indian government has blamed the spurt in wheat prices on speculators and hoarders who affect wheat supply. While the government is confident of adequate stocks to meet domestic demand, imports would be considered to counter hoarding effects.

So far, the government has procured 14.77 million tonnes of wheat in addition to the buffer stock requirement of two million tonnes. The total procurement of wheat during 2004-05 was 16.790 million tonnes.

Projected wheat output this year is 73.50 million tonnes, lower than the earlier estimate of 74.050 million tonnes, according to government reports.  India produced 72.10 million tonnes of wheat in the previous year.

But industry estimates put this year's output at only about 71 million tonnes.