Wheat Prices Steady to Firm Across Major Centres

New Delhi, June 28 (Commoditiescontrol): Wheat continued to trade steady to firm across major centers on Friday as sellers became reluctant to sell at current rates. Delhi wheat prices recovered by INR 10 per quintal, a trend observed across other major centers in India.

Delhi prices traded up by INR 10 per quintal at INR 2700 per quintal. In Rajasthan, new wheat prices increased by INR 10 per quintal to INR 2680 per quintal. Bengaluru prices rose by INR 15 per quintal to INR 2925 per quintal (net), while MP wheat traded steady at INR 2630 per quintal ex-warehouse. UP saw prices increase by INR 20 per quintal to INR 2590 per quintal, and Uttarakhand traded up by INR 20 per quintal to INR 2620 per quintal. Gujarat prices increased by INR 10 per quintal to INR 2690 per quintal. Kolkata remained steady at INR 2740-2750 per quintal, and Bihar wheat traded steady at INR 2550-2560 per quintal. Goa mill delivered rates were steady at INR 2890-2900 per quintal from the last session.

In North India, wheat arrivals have declined significantly, and most stockists are reluctant to sell at current rates. This could lead to some improvement in wheat prices in the near term. Although the government has been hesitant to cut import duties on wheat, market participants have been urging for shipments from abroad to maintain the demand-supply balance. While imports are not banned, the current 40% duty is high enough to dissuade even powerful traders.

During the wheat conclave held on June 27-28, millers expressed that importing wheat would ensure adequate availability of the staple grain during the festive season starting in mid-August. Mills in some states, especially in the central region, hold more wheat stocks, which they plan to sell at higher prices during the festive season, posing a challenge for other millers with low stocks.

Market participants suggest that August would be the ideal time to place import orders for wheat. If the government allows wheat imports in August, shipments could reach the country before Diwali. South Indian and Maharashtra millers are becoming active buyers, but most sellers remain reluctant. Given the current scenario, wheat prices are likely to rise in the near term in these zones.

Kolkata buyers were active today, while most sellers were reluctant to sell at current rates. Most stockists have fewer than 3,000 tons of wheat in their possession, having stockpiled in anticipation of potential wheat stock limits. This limit makes it unlikely that wheat prices will be significantly impacted.

In Bengaluru, some rake purchasers are aggressively buying wheat from Etah/Shahjahanpur mandi and delivering it at INR 2925 per quintal. Wheat prices are expected to rise as southern buying is likely to remain strong.

Global prices have softened by 7-8% from recent highs due to a Turkish import ban and slight improvements in Russian and Australian crop forecasts. Parity has increased in recent weeks, and if the government reduces import duty, imports of around 2-3 million tons could easily arrive at South Indian ports.

One reason the government has not reduced import duty is the comfortable rice stock situation in India. The government can allocate more rice in PDS schemes and divert PDS wheat supplies towards OMSS as done last year. At the current production level and without imports, next year’s carryover stock is expected to remain at 7.5 MMT, indicating tight availability continuing into next year.

Given the current supply-demand mismatch, Indian wheat prices are likely to rise in the near term unless the government introduces new measures to control prices. The government has recently intervened to keep prices under control if wheat prices rise significantly, such as introducing stock limits. If wheat prices begin to rise again significantly, the government may take additional steps like OMSS or reducing import duty if required to control prices. Thus, a very sharp rise seems unlikely in the near to medium term.