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Wheat Prices Heat up, Raising Inflation Fears - Puja Das, Ravi Dutta Mishra

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Wheat prices have started climbing again despite the government launching open market operations to reain in prices of the crucial commodity due to the unseasonal rains in key what-producing states. Wheat prices had shot up by 15% in 2022 accoding to the Ministry of Consumer Affairs, Food & Public Distribution, even before the OMOs.

This comes as retail inflation continues to hover above the Reserve Bank of India's upper tolerance level, driven by fuel and food prices. Even as retail food inflation marginally eased to 5.95% in February versus 6% in the previous month, cereal prices rose to 16.7% over concerns of a possible heat wave. 

Uttar PRadesh, a key wheat-producing state, received 44 fold increae in rainfall at 20.2 mm between 16-22 March, while Madhya Pradesh, the second largest grower, got 17.2 mm precipitation, over 20 times higher than normal. Similarly, Punjab and Haryana witnessed over two times and 20 times more rainfall respectively, Meterological data showed. 

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