Wheat grain cheaper now, but your atta, bread prices haven't dipped. Why?

While wheat prices have gone down in mandis, there is no resultant relief in atta and bread prices for households. What's behind the mismatch between the rates at which farmers sell wheat and the retail prices of flour? Who is really benefiting?

When the price of wheat falls in the mandi, it should bring relief to the kitchens because of cheaper wheat flour (atta). That's a common perception. But across India, the impact of the falling prices of wheat is nowhere to be seen. Though farmers are forced to sell wheat below the Minimum Support Price (MSP), yet, the prices of atta and bread on the dining tables haven't got any cheaper. What's the reason behind this paradox?

According to the Ministry of Agriculture and Farmers' Welfare, prices of wheat have dipped significantly in recent months. In several wholesale maidis across Madhya Pradesh, Uttar Pradesh, and Rajasthan, prices have fluctuated between Rs 23 and Rs 25 per kg in April, which has often been below the MSP of Rs 25.85 per kg. The MSP on wheat was increased by the Narendra Modi government in 2025 from Rs 160 to Rs 2585 per quintal. A quintal is equal to a hundred kilograms.

Logically, cheaper wheat should translate into cheaper flour and bread. But that has not happened in India. Retail atta prices continue to float around Rs 36 to Rs 40 per kg nationally, with branded products often selling at a range of Rs 40 and Rs 50 or more for a kilogram.

"Ideally, when wheat becomes cheaper, flour prices should also come down. But that hasn't happened. The question here is whether this is the farmer's loss or the consumer's gain, or is someone else pocketing profits in the name of consumers? The bitter truth is that the middlemen's system is thriving," said Om Prakash, agricultural expert at Kisan Tak, India Today Digital's sister portal.

"For the average household, the promise of cheaper roti remains something that is far from reach," Prakash added.

This gap between falling raw wheat prices and spiking retail prices of atta exposes a structural imbalance in the supply chain. From mandi to mill to market, wheat passes through multiple processes like milling, packaging, branding, transportation, and retail distribution. Each stage adds costs, but more importantly, it adds margins that do not always adjust downward when input prices fall.

WHAT'S BEHIND WHEAT-ATTA PRICE MISMATCH?

Agriculture experts and economists describe the situation as asymmetric price transmission. In the case of wheat flour, millers and companies tend to pass on cost increases to the customers but are slower to reduce prices when wheat becomes cheaper. This allows them to protect and even expand profit margins.

"The decline of wheat prices in mandis of several states has been driven by strong production expectations, heavy arrivals, and comfortable government stocks exceeding 22 million tonnes," said Kisan Tak's Om Prakash.

"Sweat is sold at throwaway prices in mandis, while consumers are charged premium rates in malls. This is today’s harsh reality. The farmer's loss is not turning into savings for the consumer; instead, it is becoming profit for intermediaries and branded companies," added Om Prakash.

Market structure reinforces this rigidness of pricing imbalance.

Moreover, large fast-moving consumer goods (FMCG) players dominate the branded atta segment, where pricing is influenced not just by input costs but also by brand value, packaging, and distribution networks.

But in the unorganised sector, local flour mills face fixed costs such as electricity, labour, and logistics.

The dynamics in government policy further complicate the situation. When wheat prices rise, the government often intervenes through stock limits, export restrictions, or open market sales to control inflation. But when prices fall below MSP, the focus shifts to protecting farmers through procurement.

However, this support is uneven across states in the country. The result is a system where farmers are forced into distress sales, while consumers see little benefit from lower prices.

SO, WHO GAINS? NEITHER WHEAT FARMERS NOR CONSUMERS?

The burden of the price mismatch, therefore, falls disproportionately on both ends of the chain. Farmers in regions with weak procurement systems are forced to sell at lower prices, even if it affects their incomes. Meanwhile, consumers continue to pay peak prices for the atta, which is used to make roti, a staple in several Indian states.

There is also a regional dimension. In states like Punjab and Haryana, where the wheat procurement is heavy, prices remain closer to MSP. But in other regions, where wheat procurement is limited, prices drop more sharply. This uneven transmission further widens the gap between what farmers earn and what consumers pay.

"The market regulators and government authorities appear to be asleep, as if they have no concern for this open profiteering," said Prakash. "The wider question that remains is whether the Price Monitoring Division of the consumer affairs ministry is merely collecting data, or will it actually act to rein in unchecked prices?" Om Prakash questioned.

Ultimately, the issue of the wheat-atta pricing mismatch is about how value is distributed across the system. When wheat becomes cheaper, neither the farmer gets a fair price, nor the consumer gets relief. Instead, the system continues to operate in a way where the benefits are reaped by a select few in the middle.

- Ends