Gaurav Jain
Founder and CEO
AgPulse Analytica
Wheat holds a pivotal place in India’s agricultural economy, influencing food security, farmer livelihoods, and inflation alike. As one of the largest producers and consumers of wheat globally, India’s policy decisions regarding wheat production, pricing, and distribution have far-reaching implications. With the 2025 marketing season on the horizon, stakeholders—including policymakers, traders, and farmers—are closely monitoring production trends, domestic prices, and potential policy sponses. While early signs point to an increase in production, the market dynamics suggest that challenges in procurement, price control, and supply management will persist.

CURRENT ACREAGE AND PRODUCTION OUTLOOK
According to the latest data from the Indian Ministry of Agriculture, wheat acreage has increased by 1.7% year-on-year, as of early January. This rise in acreage, combined with favorable weather conditions across major wheat-growing regions, has led to an optimistic production forecast. For the rabi marketing season (RMS) 2025/26, AgPulse Yield model suggests a production of approximately 116.4 million metric tons (MMT), reflecting a 3% increase over the previous year.
India wheat SnD for MY 2025/26 from AgPulse estimates
While the projected increase in production is encouraging, it comes against the backdrop of rising domestic consumption. We believe that consumption will grow by 2 MMT, driven by population growth and increased demand for wheat-based products. This is a conservative estimate for demand growth in view of increased prices. If prices cool down, demand can increase by 4-5 MMT. This means that while production may rise, it may barely outpace demand, keeping supply tight.
RISING DOMESTIC PRICES
Despite the anticipated rise in production, India’s wheat market remains tense. Domestic prices have continued to rise, reflecting a shortage in the domestic market for the old crop, which is unlikely to be resolved until the new harvest arrives.

The primary reason for this price surge is the limited availability of wheat in private hands. Private traders and farmers, who play a crucial role in ensuring market liquidity, have reported low inventory levels. This growing demand-supply gap, coupled with reduced private stocks, has resulted in a sharp increase in wheat prices, raising concerns about inflation.
MARKET INTERVENTIONS
To counter soaring prices, the government has been actively using the Open Market Sale Scheme (OMSS). Under this scheme, the Food Corporation of India (FCI) sells wheat directly to bulk consumers and traders to stabilize market prices. Of the total 2.5 MMT of wheat announced for sale under OMSS, auctions for 500,000 metric tons (KMT) have already been conducted, with over 95% of the offered quantity being sold.
Chart shows Rabi acreage for wheat till January for past years
Despite these sales, market prices are soaring high. This indicates that OMSS interventions have been insufficient to provide any relief and to address the underlying supply constraints. Government may need to increase the quantity of wheat offered under OMSS in the coming weeks to further ease market pressures.
GOVERNMENT DISTRIBUTION SCHEMES AND PROCUREMENT GOALS
A significant portion of India’s wheat is distributed through various government welfare schemes, such as NFSA and PMGKAY, which ensures food security for millions of citizens. To support these schemes and maintain buffer stocks, the FCI procures wheat from farmers at the Minimum Support Price (MSP).
The balance sheet for the Food Corporation of India, based on AgPulse estimates.
To ensure smooth running of welfare schemes, maintain buffer stock and control domestic prices, we believe the government to set a procurement target of 30 MMT. Achieving this target, however, will not be easy. With market prices currently well above the MSP of INR 24.25 per kg, farmers are likely to prefer selling their produce to private traders who offer better returns. Historically, when market prices have exceeded the MSP, government procurement has struggled. Without sufficient procurement, the government risks depleting its buffer stocks, which could disrupt welfare schemes and exacerbate food inflation.
THE IMPORT DEBATE
Given the current production forecast of 116.4 MMT, the government has ruled out the possibility of wheat imports for now. India traditionally avoids wheat imports to protect domestic farmers from international competition. While, importing wheat could help stabilize domestic prices, it is seen as a last resort due to its political and economic implications. Imports could undermine domestic farmers by lowering market prices, leading to potential unrest in the farming community. Moreover, the logistical and financial costs of importing large quantities of wheat would place additional pressure on the exchequer.
