January 4, 2023
India considering to sell wheat in the open market
Two Indian government officials said the Indian government is considering to sell 2.1 million tonnes of wheat on the open market in order to reduce food inflation, with a final decision to be made in the next 10 days, Money Control reported.
The government is organising the intervention through its open market sale programme, which it employs to sell grains at a fixed price.
One of the two officials said the government will make a decision on the planned intervention in the next seven to 10 days.
After deciding to end the free foodgrain distribution programme that had been in place for 28 months, the government now has about 2.1 million tonnes of surplus wheat above the required buffer, the second government official said.
The official said that until April, the government will have 3 million tonnes of extra wheat available for intervention, which would be sufficient to control prices.
A spokesperson for India's food ministry was unavailable for comment.
Wheat is still close to its record high prices in India, the fact that the country's November retail inflation reading came in below the upper end of the central bank's target band for the first time last year due to a softer rise in food prices.
As the third largest economy in Asia, food prices are crucial to regulating retail inflation because they make up nearly 40% of the consumer price inflation basket. Food price inflation decreased from 7.01% in October to 4.67% in November.
In order to control prices, India banned what exports since May 2022.
- Money Control