MUMBAI, INDIA — India’s wheat prices have dropped 13% after the government offered 3 million tonnes of grain to bulk consumers such as flour millers, Reuters reported.

Wheat prices dropped to $347.11 per tonne after hitting a record high last week due to low stocks. Domestic prices are still higher than the state-set support or guaranteed price, Reuters said.

The price increase reflects a drop in state purchases of wheat. Each year the government-supported Food Corporation of India (FCI) buys millions of tonnes of wheat at a fixed support price. It also buys wheat from local farmers.  

In 2022, FCI’s purchases dropped 53% as open market prices stayed above the rate at which the government buys wheat.

A government source told Reuters that it doesn’t want FCI procurement to drop this year, which is why it has released 3 million tonnes of wheat.

India’s wheat exports increased after Russia’s invasion of Ukraine, pushing up local wheat prices. India ordered a ban on exports in May but that did not stop domestic price increases.