Bearish Risk: India's Wheat Output Cut to 110-120 MT; FMCG Input

India's Food Secretary estimates wheat output for 2025-26 at 110-120 million tonnes, a downward revision attributed to unseasonal rains and hailstorms. This lower-than-expected production could strain domestic supply despite increased government procurement targets.

Reduced wheat output directly impacts food inflation, a key concern for the RBI and consumers. For the Indian stock market, this translates to potential margin pressure for companies in the food processing and FMCG sectors that use wheat as a primary raw material.

FMCG giants like ITC, Nestle India (NESTLEIND), and Britannia (BRITANNIA) are likely to face negative impacts due to increased input costs for wheat-based products. Retailers like Avenue Supermarts (DMART) could also see pressure on consumer demand if food inflation rises significantly. The government's open market sale scheme policy will be crucial to watch.

Traders should monitor the actual procurement figures, the details of the new open market sale scheme policy, and global wheat price trends. Any further adverse weather events or changes in export policy could exacerbate or alleviate the situation. Watch for inflation data releases and RBI commentary.

• •India's wheat output for 2025-26 is projected between 110-120 million tonnes.
• •Unseasonal rains and hailstorms have damaged crops in key growing states.
• •Government has increased its wheat procurement target to 34.5 million tonnes.
• •Exports are permitted but facing slow shipments.
• •A new open market sale scheme policy is expected soon.