India govt to take final call on selling wheat in open market in 10 days – sources

Jan 3 (Reuters) – The Indian government is considering selling 2.1 million tons of wheat in open market to control food inflation and a final decision will be taken in the next 10 days, two government officials told Reuters on Tuesday.

The intervention is being planned by the government via its open market sale programme, which it uses to sell grains at a pre-determined price.

“The government will take a decision in the next seven to 10 days on the planned intervention,” said one of the two officials.

The government has about 2.1 million tons of surplus wheat over and above the mandated buffer after it decided to discontinue the free foodgrain distribution program that was operational for 28 months, said the second government official.

Until April, the government will have 3 million tons of surplus wheat for intervention, which would be enough to control prices, the official added.

A spokesperson for India’s food ministry did not immediately comment.

Even though India’s November retail inflation reading came in below the upper end of the central bank’s target band for the first time last year on the back of a softer rise in food prices, wheat is still near its record high, trading at 28,910 rupees per tonne on Tuesday.

Food prices are key to control retail inflation in Asia’s third largest economy as it accounted for nearly 40% of the consumer price inflation basket. Food price inflation eased to 4.67% in November from 7.01% in October.

India has also banned export of wheat since May 2022 to control prices.

Reporting by Nikunj Ohrid; Editing by Dhanya Ann Thoppil

Our Standards: The Thomson Reuters Trust Principles.

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