India to sell 2.5 mln T wheat from state stocks to flour millers
By Rajendra Jadhav and Mayank Bhardwaj
MUMBAI, Nov 28 (Reuters) -India plans to sell 2.5 million metric tons of wheat from its state reserves to bulk consumers such as flour millers and biscuit makers, as New Delhi tries to bring down prices from record highs by boosting supplies, government officials said.
The state-run Food Corporation of India (FCI) will soon start offering wheat from its inventories by inviting tenders and will sell the grain at 23,250 rupees ($275.34)a ton, said a government official, who declined to be named.
The offered quantity is far lower than market expectations and will not be sufficient to bring down prices substantially, as it did last year, said a Mumbai-based flour miller.
Last year, FCI began selling wheat to private players in June. It sold a little more than 10 million metric tons in the fiscal year to March 2024, a record sale from state reserves.
"Flour mills are scrambling for wheat since their stocks are nearly dry. There will be aggressive bidding for FCI's supply. The demand is massive and 2.5 million tons could easily be absorbed in just a month," the miller said.
In September, New Delhi lowered the limit on wheat stocks that traders and millers can hold to help boost the grain's availability and moderate prices.
But the curbs failed to bring down prices, which were around a record 32,000 rupees per metric ton in Delhi, up from 25,000 rupees in April and far above the government fixed minimum support price of 22,750 rupees for last season's crop.
Wheat stocks in state warehouses were 22.3 million tons at the start of November, slightly higher than the last year's 21.9 million tons, but far below five-year average of 32.5 million.
Indian farmers have started planting the new season wheat crop, but supplies will only become available from March, traders said.
($1 = 84.4410 Indian rupees)
Reporting by Rajendra Jadhav and Mayank Bhardwaj; editing by David Evans
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