New Delhi, November 4 (Commodities Control): Wheat prices remained steady to firm on Monday as buyers were compelled to offer higher bids due to sellers’ reluctance to sell at current rates. Prices were stable in some markets, while they increased by INR 20-30 per quintal in others, reflecting a cautious market sentiment. The absence of strong indications from the government regarding the implementation of price control measures is also providing support to wheat prices.
In Punjab, buyer activity is gradually increasing, although sellers are hesitant to part with their stocks at the prevailing prices. The Amritsar market saw prices touch INR 3100 per quintal, bolstered by reports of the government denying the possibility of Open Market Sale Scheme (OMSS) operations. Compounding these market dynamics, wheat sowing in Punjab and Haryana has been delayed by about two weeks due to holdups in paddy procurement, preventing farmers from harvesting their paddy fields in a timely manner.
In Delhi, millers were notably active today as concerns over short-term wheat supplies prompted them to stockpile. Millers in southern India are also beginning to engage more actively in the market. This shift in sentiment is further fueled by the government’s recent denial of the likelihood of wheat imports in the near future, contributing to sellers' inaction.
In the Delhi market, wheat prices increased by INR 300 per ton, settling at INR 31,500 per ton. Uttar Pradesh prices remained steady at INR 29,000-29,250 per ton, while Uttarakhand saw an uptick of INR 100 per ton, reaching INR 29,400. Bengaluru prices also rose by INR 100 per ton to INR 33,100. Madhya Pradesh and Rajasthan reported stable prices at INR 29,100 per ton, while Gujarat’s prices climbed by INR 200 to INR 29,500 per ton. The Lokvan variety in Gujarat held steady between INR 30,900 and INR 31,000 per ton. Kolkata’s prices remained unchanged at INR 31,800 per ton, and Bihar’s prices were stable at INR 29,700 per ton, primarily catering to Kolkata’s supply needs.
Additionally, the government has increased the Public Distribution System (PDS) quantity to 3.5 million tons starting in October, which is now being distributed across various states, including Madhya Pradesh and Odisha. This high diversion of PDS wheat could potentially reduce the quantity available under OMSS, further influencing wheat prices upward in the coming months. The annual wheat allocation for free rations is set to rise to 22 million tons, although it remains short of the 28 million tons allocated before May 2022. Starting November 1, ration card holders in Uttar Pradesh will notice adjustments in wheat and rice prices, with Antyodaya beneficiaries now receiving 18 kg of rice and 17 kg of wheat per card.
The Food Corporation of India (FCI) wheat stocks are estimated at 23.78 million tons as of October 1, down from 24 million tons the previous year, but still above the buffer stock requirement of 20.52 million tons. The government's lack of indication regarding OMSS operations has fostered a positive market sentiment. According to media reports, the government has allocated 2.5 million tons of wheat for OMSS.
Globally, wheat is being offered at CIF USD 270 per ton from Ukraine, remaining steady from last week amid muted demand. There is a price parity of USD 70-75 per ton at zero duties, but if domestic prices rise by another INR 200-300 per quintal, imports could be triggered at a 44% duty rate. The government has indicated no plans to lower import duties, citing comfortable domestic supplies, with processors reporting around 8-9 million tons available according to the food ministry portal.
Given the current scenario of weak physical supply, wheat prices are expected to rise by INR 25-50 per quintal in the near term as the market adjusts to ongoing demand and supply challenges.
(By Commoditiescontrol Bureau; +91 98201 3018)
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