India ups state purchase price for wheat by 7%

India has raised the minimum price at which it buys wheat by nearly 7% in a bid to encourage farmers to plant more wheat, according to a statement by agriculture minister Radha Mohan Singh.

The government said will pay 1,735 rupees ($26.75) for a quintal of wheat for the upcoming crop, which is being planted now.

A quintal is equal to 100kg, meaning the minimum purchase price has risen to $267.50/mt, which is around $80/mt higher than product out of the Black Sea.

The previous price was 1,635 per quintal.

India produces almost 100m mt of wheat a year, yet still imports about 3.5m mt a year.

The move comes amid reports that China may reduce its state price for grains amid growing stocks.