MUMBAI, Oct 18 (Reuters) – India raised the worth at which it buys regionally produced new-season wheat by 150 rupees or 7% to encourage farmers to increase the rising space as New Delhi tries to extend manufacturing.

India, the world’s second largest wheat producer, units a value every year to guard home farmers from misery gross sales and inventory grain for emergency wants. It additionally makes use of grain to promote meals to the poor at low costs.

The revised buy value of two,275 rupees ($27.33) per 100 kg for 2024 compares with 2,125 rupees a yr in the past, Federal Information and Broadcasting minister Anurag Thakur informed reporters on Wednesday.

“The 7% increase is decent for encouraging farmers to expand their areas, but the government should have raised prices further to align with market prices, which are significantly higher than the government price,” mentioned a Mumbai-based dealer.

In key producing markets the wheat value was above 2,600 rupees on Wednesday, an eight-month excessive, propelled by robust demand for giant festivals, restricted provides and as import responsibility makes abroad shopping for unfeasible for home flour mills.

The authorities estimates wheat output jumped to a document 112.74 million metric tons in 2023, however a number one commerce physique mentioned the harvest was no less than 10% decrease than the farm ministry’s estimate.

As of Oct. 1, wheat shares in authorities warehouses stood at 24 million metric tons, sharply down in contrast with a five-year common of 37.6 million tons.

($1 = 83.2420 Indian rupees)

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