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Indian wheat prices have surged to unprecedented levels, driven by strong demand, limited market availability, and a delay in government stock releases. Industry experts warn that these high prices could further escalate retail inflation, which hit a 14-month peak in October due to soaring vegetable prices, potentially affecting central bank decisions on interest rates.

Market supplies remain tight, with stockists showing reluctance to release wheat at lower prices. Releasing government-held stocks is seen as a potential solution to ease supply pressures and bring stability to prices, as has been effective in similar situations in the past.

In September, the government imposed stricter stockholding limits on traders and millers to increase availability and moderate prices. However, this measure has had little effect, with prices rising significantly above the government’s minimum support price of ?22,750 for last season’s crop.

The price escalation is expected to persist until the new crop reaches markets in March, according to traders. Bulk buyers are under pressure to secure supplies at inflated costs to maintain operations. Traders press on the urgency of immediate government intervention to release stocks and curb further price hikes.

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The government initially planned to sell wheat from its reserves to bulk consumers starting in July, but delays have left market participants uncertain. Last year, similar stock releases began in June, with a record 10 million tons sold by March, which helped stabilize prices and support bulk buyers.

Current wheat reserves in state warehouses, at 22.3 million tons, are slightly higher than last year’s 21.9 million tons but remain well below the five-year average of 32.5 million tons. Lower stock levels are cited as a key reason for the government’s hesitation to release supplies, further intensifying market challenges.