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Wheat Prices Steady Amid Stable Supplies and Reduced Marriage Season Demand

13 Dec 2024 6:05 pm
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New Delhi, 13 December (CommoditiesControl): Wheat prices held steady across major markets today as current supplies were sufficient to meet demand. Market sentiment remained stable, with the seasonal demand from marriages expected to dip as there will be no weddings from December 14 to January 14. This has contributed to the stability in wheat prices, particularly as demand typically increases during this period.

In Delhi, wheat prices traded steady with a slight negative bias, settling at INR 3080-3100 per quintal, compared to the previous session. Uttar Pradesh saw neutral pricing at INR 3000 per quintal, while Madhya Pradesh held steady at INR 2980 per quintal. Gujarat prices also remained unchanged at INR 2990 per quintal, as did Rajasthan and Bihar, both trading at INR 2990 per quintal. Kolkata wheat was priced at INR 3250 per quintal, with South India seeing a slight increase of INR 10, bringing the price to INR 3350 per quintal.

Despite the steady prices, market sentiment has been slightly sluggish. This follows the recent reduction in the government’s stock limits for wheat, which has affected buyer behavior. However, most buyers have maintained their prices, as their stock levels are still lower than the revised stock limits.

In the latest wheat e-auction held on December 11, the results showed continued demand, with nearly 100 percent offtake for the second consecutive week. The Food Corporation of India (FCI) successfully auctioned 99,815 tonnes of wheat, with over 1480 processors awarded the grain. The first round of the auction had also seen similar results, with 1,501 processors purchasing 98,700 tonnes.

Of the 23 states and regions where bidding occurred, 19 states had a 100 percent offtake, while three states saw a near-total offtake between 99 and 100 percent. The northeastern region, however, had a slightly lower offtake rate of 85 percent, an improvement from the previous week's 60 percent.

In terms of pricing, mills in Karnataka have managed to purchase wheat at lower rates—around INR 2,650-2,700 per quintal—from FCI auctions for wheat transported from Ludhiana, while prices in the open market are much higher, around INR 3,400 per quintal for deliveries in Uttar Pradesh.

Despite some sluggish sentiment, sellers are also showing a lack of activity in the physical market, indicating that wheat prices are likely to remain rangebound in the short term. However, there is speculation that the government may increase the stock quantity in the upcoming Open Market Sale Scheme (OMSS) auctions. If this occurs, wheat prices could face downward pressure as the government aims to keep mandi prices near or below the Minimum Support Price (MSP) for upcoming procurement.

Overall, if the government continues to sell 1 lakh tonnes of wheat through the OMSS, wheat prices are expected to trade steady with a positive bias, given solid demand. However, any increase in the stock quantity could lead to a more stable-to-weak price trend in the coming weeks.


(By Commoditiescontrol Bureau; +91 98201 3018)


       
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