December 16, 2009

 

India to lower wheat sale price by US$4 per 100 kilograms

 

 

A panel of Indian ministers has decided to lower the price of wheat sold to bulk consumers from federal stockpiles, as current high prices have led to poor sales, a senior government official said Tuesday (December 15).

 

Prices will be reduced by up to INR200 (US$4.25) per 100 kilograms, to around INR1,200 (US$25.78) to INR1,600 (US$34.38)/100 kg.

 

India, the world's second-largest wheat producer, has tendered to sell 500,000 tonnes of government wheat to bulk users, such as flour millers, between October and December.

 

The price band set by state-run Food Corporation was INR1,389.95 (US$29.87) to INR1,789.70 (US$38.46)/100 kg for wheat sales in New Delhi.

 

The wheat industry had opposed the sale as the price was higher than market rates, triggering a rise to record-high domestic spot and futures levels.

 

Sales as of the first week of December totalled around 22,000 tonnes, a food ministry official said last week.

 

India plans to sell a total of 3 million tonnes of wheat and 1 million tonnes of rice to state governments and bulk users under the Open Market Sales Scheme through March 31, 2010.

 

The country's wheat stocks as of Dec. 1 totalled 25.16 million tonnes, more than double the buffer norm of 11 million tonnes.

 

In the fiscal year ended March 31, India harvested a bumper crop of 80.58 million tonnes of wheat. The government is aiming to increase this by 2 million tonnes in 2009-10.

 

In India, wheat is usually sown in November and the crop is harvested from March onward.