Indian Wheat Prices Soar Amid Supply Crunch

Indian wheat prices have hit a record high due to strong demand, limited supplies, and delayed government stock releases. This price surge, fueled by rising vegetable costs, threatens to elevate inflation and hinder potential interest rate cuts by the central bank. The market remains strained as stockists resist releasing wheat at lower prices.

Indian wheat prices have surged to historic levels amid robust demand and constrained supplies, industry officials announced on Tuesday. The government's delayed stock release has catalyzed this price escalation, contributing to heightened retail inflation already driven by soaring vegetable prices.

This inflation spike has dashed hopes for an interest rate reduction by the central bank in the coming month. Market supplies are scant, as stockholders are reluctant to part with wheat at reduced prices, explained Pramod Kumar, a flour miller. He noted that a government stock release could stabilize prices.

In an effort last September, New Delhi reduced wheat stock holding limits for traders and millers, aiming to boost market availability and moderate prices. However, this measure did not prevent price inflation, with current rates in Indore standing at 30,000 rupees per metric ton, a significant increase from earlier this year. Traders predict further price hikes if the new crop isn't available until March.

(With inputs from agencies.)