Wheat prices are touching new highs since the beginning of this month.

- Open market sales in doubt following recent raids and questions raised over actual quantity of stocks

AHMEDABAD: With wheat prices touching new highs since the beginning of this month, all eyes are on the central government's open market sale of the grain. Trade sources said the open market sale is in doubt following recent raids on Food Corporation of India officials and questions over the actual stock holdings of the food corporation.

Official data shows that India's estimated stock of wheat in the central pool as on January 1, 2023 was 171.7 lakh tonnes. This is about 24.4 percent more than the amount of strategic reserve.

Of the 171.7 lakh tonnes of wheat in the central pool, about 105 lakh tonnes (about 61 per cent) are held by state agencies. However, between January 1 and January 17, the price of wheat in the Delhi market has increased from Rs 2,900 per quintal to Rs 3,060 to Rs 3,100 per quintal. Its price has increased by 3 to 7 percent in 20 days.

Flour mill owners have been repeatedly appealing to the government to sell some of their wheat stocks in the open market to domestic consumers, so that prices can come down immediately. Prices are increasing due to scarcity in the market.

Sources said the Center should immediately remove some of the stocks from its reserves. This will reduce prices as stockists and wholesalers run out of stock while demand is high.

Traders are hopeful that the central government will release around two million tonnes of wheat from its stocks. The recent decision to scrap the Pradhan Mantri Garib Kalyan Anna Yojana from January 1 will give the Center flexibility to intervene in the open market.