India asks traders to avoid buying new-season wheat to shore up state stocks
India has asked global and domestic trade houses to avoid buying new-season wheat from local farmers to help the government-backed Food Corporation of India (FCI) procure large quantities to shore up its depleting reserves, sources said.
India, the world's biggest wheat consumer and grower after China, banned exports in 2022 and is keen to bolster stocks and tame prices that surged after dry weather hurt output in 2022 and 2023.
Rising wheat prices forced the government to sell record quantities to boost local supplies, leading to a drawdown in reserves essential for the world's biggest food welfare programme, which entitles nearly 800 million to free grain.
The government has asked private traders to stay away from wholesale markets where farmers usually sell their produce to FCI or private traders, said traders and government sources, who declined to be named as they were not authorised to talk to the media.
The government informally asked private traders to avoid buying wheat at least in April, the sources said, its first such guidance since 2007. Wheat procurement starts tapering off after mid-May.
«We are not going to buy in April. We will wait until May. Except for processors and small traders, everyone is likely to follow the government's lead,» said a Mumbai-based trader with a global trade house.
Traders active in India's grain markets include Cargill Inc, Hindustan Unilever Ltd, ITC Ltd, Louis Dreyfus Company and Olam Group.
The government has asked the top wheat-growing states to ensure that
