The Modi-government on Tuesday announced it will offload an additional 20 lakh tonnes of wheat in the open market to check soaring prices of the foodgrain.

Wheat price in the retail market is up 15.85 per cent at Rs 33.19 per kg on Tuesday compared with a year ago, while the price in the wholesale market has shot up to Rs 2,951.76 per quintal, an increase of 20.89 per cent, according to Department of Consumer Affairs data.

“As temperature rises in North India, the Modi government has started feeling the heat and has stepped up measures to deal with it, as its failure to deal with the situation deftly could adversely impact its 2024 general election outcome,” analysts said.

The Centre on January 25 had announced the sale of 30 lakh tonnes of wheat in the open market from its buffer stock to check the rise in prices of wheat and wheat flour. According to an official statement, the government has decided that state-owned Food Corporation of India (FCI) will offload an additional quantity of 20 lakh tonnes of wheat in open market under the open market sale scheme.

The stocks will be for sale through e-auction to flour mills, private traders, bulk buyers and manufactures of wheat products. The proposal to sell stocks in the open market was taken by a group of ministers, sources said.

“So far, 50 lakh tonnes (30+20 lakh tonnes) of wheat have been decided to be offloaded under the OMSS. The reduction in reserve price along with additional offloading of 20 lakh tonnes will collectively help in reducing market price of wheat and wheat products for consumers,” the statement said.

Prices have been going up because of lower procurement in the rabi season and the heat wave across several North Indian states. Analysts have forecast El-Nino could impact the south-west monsoon, affecting kharif production.

Crisil Research in a report said: “We expect the price sentiment to remain strong for all cereal crops in absolute terms for the next fiscal. Production of wheat is anticipated to be higher in the current rabi season. The continued ban on exports and discontinuation of the Pradhan Mantri Garib Kalyan Anna Yojana since January 2023 (free food grain scheme announced in April 2020) are also expected to bring the stock position up to a comfortable level.”