MUMBAI, Nov 12 Reuters Indian wheat prices have jumped to a record high due to strong demand, limited supplies, and a delay in the government releasing stocks from its warehouses to augment supplies, industry officials said on Tuesday.
The record prices are likely to lift retail inflation that surged to a 14month high in October, driven by a jump in vegetable prices and dashing hopes of an interest rate cut by the central bank next month.
Supplies are limited in the market, and stockists are unwilling to release wheat at lower prices, said Pramod Kumar, a flour miller.
If the government begins releasing stocks, supplies will improve, and prices will decrease, as they did last year.
In September, New Delhi lowered the limit on wheat stocks that traders and millers can hold to help boost the grain39;s availability and moderate prices.
But the curbs failed to bring down prices, which were trading around 30,000 rupees 355.64 per metric ton in Indore in central state of Madhya Pradesh, up from 24,500 rupees in April and far above the government fixed minimum support price of 22,750 rupees for last season39;s crop.
Traders anticipate that prices will rise further as the new season39;s crop is not expected to reach the market until March, said a Mumbaibased dealer with a global trade house.
Bulk buyers are feeling the squeeze, as they need to buy to keep their operations running. The government needs to start releasing stocks immediately, or prices will rise further,…