Wheat prices are crashing, thanks to an oversupply of the commodity. Nearly 78 million tonnes of wheat has been added to the existing stocks during the current season. This coupled with a two-year ban imposed by the government on export of wheat is creating a much bigger problem. State agencies are expected to buy about 24 mt of wheat in 2009-10 season compared to 22.5 mt they bought last year. Wheat is currently trading at prices much below the minimum support price in major markets like Uttar Pradesh and Rajasthan. What plagues Indian wheat suppliers is, however, the higher taxes in the largest wheat growing states of Punjab and Haryana which could probably keep international agri-trading entities like Cargill, Glencore and the Australian Wheat Board from buying Indian wheat.

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