As per the WPI index, food inflation rose sharply to 18.18 percent in August, while the general inflation increased to 6.1 per cent in the same period.

"Prices of food grains have been rising despite good production and storage in the last few years. We are analyzing that. We will find out reasons behind undue inflation in food grains," Thomas said.

He was addressing the 73rd annual general meeting of Roller Flour Millers' Federation of India.

"There is always some increase in prices of agri- commodities with regular hike in the minimum support price (MSP) of these commodities every year. But the inflation in food grains should not be this sharp when there is sufficient supply," he added.

As per the official data, WPI inflation in rice was at 20.13 percent, while it stood at 7.6 per cent in wheat during last month.

To control prices and clear space in Food Corporation of India (FCI) for new crop, Thomas said the government has eased norms for selling 8.5 million tons of wheat to bulk traders like flour mills under the open market sale scheme (OMSS).

Earlier, bulk traders were allowed to buy FCI wheat only from Punjab and Haryana under OMSS at the reserve price of Rs 1500 per quintal through the tender process. Now they can also buy it from FCI depots in respective states by paying the reserve price plus freight charges from Ludhiana, he said.

Also, the government has decided to set up a Committee of Secretaries (CoS) to review the reserve price of wheat and freight charges regularly for OMSS sale, keeping in view the fluctuation in wheat prices. The decision taken by the CoS will be ratified by the group of ministries, Thomas added.

As on September 1, food grain stock with FCI was at 58.93 million tons. Of this, wheat stood at 38.3 million ton and rice 20.5 million ton. FCI is the government's nodal agency for procurement and distribution of food grains.

Country's food grain production was at 255.36 million tons last year, of which wheat stood at 92.46 million tons.
Food grain production is expected to be at a record level this year on account of a better monsoon.


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