New Delhi, July 02 (CommoditiesControl): Today, wheat prices fluctuated across key centers due to a balance between supply and demand. Some stockists released more wheat into the market following government orders to audit enterprises that hold wheat inventories above the stock limits.
Private entities are now required to report their wheat stock positions every Friday on the portal of the Department of Food and Public Distribution. Stock limitations on wholesalers, merchants, and processors were imposed last Monday, with these limits remaining in effect until March 31st.
In Delhi, prices dropped by INR 10 per quintal, reaching INR 2670 per quintal as certain retailers complied with GOI-imposed stock limit requirements. New wheat from Rajasthan remained stable at INR 2680 per quintal. Both the Bengaluru and MP wheat markets also remained stable, with prices at INR 2925 per quintal (net) and INR 2630 per quintal (ex warehouse), respectively. Prices in UP and Uttarakhand remained unchanged at INR 2590 and INR 2620 per quintal, respectively. Gujarat saw a decrease of INR 10 per quintal, selling at INR 2690 per quintal. Kolkata's prices remained stable at INR 2750 per quintal. Bihar wheat prices remained unchanged at INR 2550–2560 per quintal, while Goa mill supplies remained stable at INR 2890–2900 per quintal.
Wheat arrivals in North India have dropped sharply, and stockists are hesitant to sell at current prices. As a result, wheat prices are likely to rebound soon. Despite the government's ambiguous stance on reducing wheat import duties, market players are advocating for foreign shipments to balance domestic demand and supply. Imports are not banned, but the 40% tax deters even influential merchants.
Recently, Food Department officials denied any intention to reduce import duties. However, to maintain market stability, Food Secretary Sanjeev Chopra stated at a conference last Monday that the Centre would consider all possibilities, including reducing duties.
Millers see importing wheat as a viable option to ensure sufficient supplies for the festival season starting in mid-August. According to the wheat conclave held on June 27th and 28th, some mills in the central region have extra wheat saved for the holiday season, posing a problem for those short on supplies. Market participants suggest August as the optimal time to order wheat imports, with permits potentially being issued to allow shipments before Diwali.
Processed wheat product demand is expected to strengthen in the coming weeks, with buyers, particularly southern millers, becoming more active. Rains have drastically reduced arrivals, making stockists hesitant to sell at current prices. The likelihood of the government lowering import duties soon appears low, especially with active millers in the south.
Globally, prices have fallen by 7-8% from recent highs due to Turkey's import embargo and slight increases in crop projections in Russia and Australia. If the government reduces import duties, it would facilitate the arrival of two to three million tons of wheat at southern Indian ports, with CNF shipping quotes to India ranging between USD 270 and USD 275 per ton.
Given the current market conditions, it is unlikely that wheat prices will fall by more than INR 30-50 per quintal, regardless of government measures like OMSS or reduced stock limit quantities. Conversely, any significant medium to long-term price increase would be limited by government policy.
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