October 22, 2009
India's wheat industry Wednesday (October 21) urged the government not to delay announcing the price of wheat proposed to be sold from federal reserves as speculation was causing spot market prices to rise.
The government is planning to sell 3 million tonnes of wheat from its stocks in the open market. Local newspaper reports of a price between INR1379.70 (US$29.86) to INR1,728.23 (US$37.42) per 100 kilogramme haven't been confirmed.
"This [speculation on prices] resulted in rise in wheat price rises in the open market," Veena Sharma, secretary of Roller Flour Millers' Federation of India, said Wednesday. She urged the government to announce the price as the speculation would hurt consumers and industry.
Spot wheat prices in New Delhi touched INR1,310/100 kilograms Wednesday, and are up about 8 percent since Oct. 1.
In the futures market too, wheat prices rose Tuesday hitting the upper circuit of 4 percent to INR1,333.20/100 kilograms. Wheat prices in the futures market have risen about 10 percent since Oct. 1.
Traders also say the federal government's plan to increase the state-set wheat purchase price from farmers by INR50 from INR1,080/tonne have also fuelled prices.
The government's proposal to increase the price is aimed at encouraging increased sowing. Wheat is sown October-November and harvested from April onwards.
US$1 = INR46.18 (Oct 22)