By Rajendra Jadhav
MUMBAI, India, Feb 21 (Reuters) – India will supply an additional 2 million tonnes of wheat to wholesale consumers as well as millers as part of efforts to bring down prices, which hit a record high last month , the government announced on Tuesday.
The allocation, on top of the 3 million tonnes announced last month, could help dampen local prices, which are above the government-set price of 21,250 rupees ($256.77) per tonne, which has driven up consumer inflation in January.
India, the world’s second largest consumer of wheat, banned exports in May 2022 after a sudden rise in temperatures reduced production, even as demand for exports picked up to cover global shortages caused by the conflict between Russia and Ukraine.
wheat price
Authorities have tried to push prices even closer to the minimum to ensure they can buy plenty from farmers in the new season, said a New Delhi-based trader with a global trading company.
“Farmers will not sell to the government if the free market prices remain above the government buying price,” the trader said.
Last year, government purchases of wheat fell 53% to 18.8 million tonnes as free market prices exceeded the price at which the government buys grain from domestic farmers.
The country produces only one wheat crop per year, which is sown in October and November and harvested from March.
(1 dollar = 82.7580 rupees) (Additional reporting by Shivam Patel in New Delhi; Spanish editing by Javier López de Lérida)