July 27, 2012

India to control wheat's rising prices locally

In order to reduce stress over government warehouses and curb rising prices in the domestic market, India has sold around 0.7 million tonnes of wheat through Open Market Sale Scheme (OMSS) to bulk users.

The wheat is being sold at INR1,170 (US$21.1) per quintal (including freight cost), compared to normal procurement prices of INR1,822 (US$33) per quintal.

The domestic price of the commodity in National Commodity and Derivatives Exchange (NCDEX) for August delivery rose 17.38% to INR1,461 (US$26) per quintal during the month of July till July 23.

Meanwhile, due to record production of food grains and procurement for the past few years, India's warehouses are overflowing with surplus stocks.

And with the allocation of wheat through different schemes would reduce stress over the warehouses and also will help in controlling the prices.

In India's National Commodity and Derivatives Exchange (NCDEX), for August delivery, wheat traded at INR1,396 (US$25.2) per quintal on July 24 at 15:30 IST.