Berliner Boersenzeitung - India trims weekly wheat auction volume despite strong miller demand

India reduced the wheat offered in its October 28 weekly auction to 101,000 tonnes even as millers reported tight open-market supplies and bids above ₹3,100 a quintal.

Millers have suggested to the government that it should progressively increase the quantity in the weekly auction since open market availability is stressed and millers are now dependent on Food Corporation of India (FCI) for supplies, according to industry sources.

“It seems there is not as much wheat in the market as was earlier thought and hence, the millers wanted to buy as much as they could from the government auction,” Dharmendra Jain, President of Roller Flour Millers’ Federation of India told businessline. He also said that the Federation has suggested to the government that it should increase the quantity in the weekly auctions.

In the bids floated by State offices of FCI in Assam, Odisha, Telangana, Andhra Pradesh, Karnataka, Rajasthan, Gujarat, Bihar and Kerala, the allocation for the latest round is about 11,900 tonnes lower than the auction held on October 21. While there may be justification for reduction of quota for Odisha to 3,500 tonnes as millers could buy only 3,050 tonnes out of 6,000 tonnes quantity offered in last round, the same does not hold true for many of the other States.

Millers in States such as Assam, Karnataka and Telanga are wondering why the government cut their allocation despite maximum offtake, another source noted. For instance, out of 8,000 tonnes wheat offered in Assam in the last round, millers were successful to buy 7,940 tonnes. Similarly, in Telangana, 3,460 tonnes were bought out of 3,500 and in Karnataka 5,430 tonnes out of 6,000 tonnes in last round. This time, the government has allocated a much lower 5,000 tonnes for Assam, 1,000 tonnes for Telangana and 5,000 tonnes for Karnataka.

On the other hand, there is a total increase of 6,450 tonnes in Maharashtra, Chhattisgarh, Himachal Pradesh, West Bengal, Jharkhand, Tamil Nadu, Madhya Pradesh, Uttarakhand and Punjab from the quantity allocated on October 16.

Punjab has got maximum allocation of 25,000 tonnes against 23,000 tonnes in last round as there were 204 successful processors/millers who offered to buy wheat between ₹3,065/quintal and ₹2,861/quintal. As much as 8,970 tonnes of wheat were sold at ₹3,000/quintal or higher rates to 72 buyers in the State.

“The offered quantity in a single depot should be decided based on the concentration of mills in the surrounding areas rather than putting a maximum cap of 500 tonne per week. For instance, Ludhiana has 18 mills having 20 per cent share in Punjab’s total flour milling capacity and it still gets same allocation as compared to other depots where there is lower demand,” said Naresh Ghai, President of Roller Flour Mills Association of Punjab.

Besides restructuring the maximum cap, the weekly allocation for Punjab should be hiked to 40,000 tonnes, Ghai said adding there is zero arrival of wheat in Punjab’s mandis. He also does not foresee easing of wheat prices.

The FCI had 479.92 lt wheat stock as on September 1, which is the highest on the date in last five years. The stock was 517.87 lt on September 1, 2021. The government had procured 357.57 lt of wheat in 2026-27 season against 299.75 lt in the previous marketing season (RMS 2025-26). India’s wheat production in 2025-26 crop year rose to record 120.66 million tonnes (mt) from 117.95 mt in the previous year.

(A.Berg--BBZ)