MUMBAI, Aug 8 Reuters Indian wheat prices surged to a sixmonth high on Tuesday due to limited supplies and robust demand ahead of the festival season, dealers said.

The increasing prices may prompt New Delhi to eliminate import duties on the cereal to bolster supplies and control prices ahead of key state polls and next year39;s general election.

Rising wheat prices could contribute to food inflation and potentially complicate the efforts of both the government and the central bank to contain inflation.

In all key producing states, farmer supplies have nearly come to a halt. Flour mills are struggling to obtain sufficient supplies in the market, said a New Delhibased trader.

Wheat prices at Indore in the central state of Madhya Pradesh rose by 1.5 on Tuesday to 25,446 rupees 307.33 per metric ton, the highest since Feb. 10. Prices have surged by nearly 18 over the past four months.

The government should release stocks from its warehouses into the open market to avoid potential shortages during the festive season, said a Mumbaibased dealer associated with a global trade house.

As of August 1, wheat stocks in government warehouses stood at 28.3 million metric tons, an increase from the 26.6 million metric tons recorded a year earlier.

Imports are necessary to lower prices. The government cannot increase supplies without imports, the dealer said.

India is considering cutting or even abolishing a 40 import tax on wheat and lowering a limit on the amount of wheat…