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Wheat Prices Steady to Weak Amid Sluggish Demand and Weak OMSS Auction Bidding

17 Jan 2025 5:49 pm
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New Delhi, January 17 (CommoditiesControl): Wheat prices traded steady to weak today, reflecting the ongoing sluggish demand and weak bidding in yesterday's Open Market Sale Scheme (OMSS) auction. Buyers showed limited interest at the prevailing rates, while sellers remained active, further contributing to the downward pressure on prices.

The Food Corporation of India (FCI) offered 145,000 tons of wheat to millers, but millers bid for only 140,000 tons at an average price lower than the previous auction. Despite increasing the offered quantities from 100,000 tons to 150,000 tons, traders anticipate that the government may increase the quantities further to bring mandi prices closer to the Minimum Support Price (MSP) levels and achieve its target of 30 million tons.

The weak demand was not confined to South India; buyers in Central and North India also appeared hesitant to engage at current rates, creating a sense of uncertainty in the wheat market.

In major markets today, Delhi witnessed a decline of Rs 50 per quintal, with prices trading at Rs 3225 per quintal. Uttar Pradesh and Madhya Pradesh saw prices hold steady at Rs 3100 per quintal, while Gujarat, Rajasthan, and Bihar also traded flat around Rs 3100-3110 per quintal. Kolkata wheat prices remained steady at Rs 3260 per quintal.

As of January 1, opening stocks stood at 18.4 million tons. After accounting for 4.5 million tons for the Public Distribution System (PDS), 9.5 million tons for buffer stocks, and 0.75 million tons for OMSS sales, the government is left with 3.7 million tons for the next 2.5 months. This is considered sufficient to keep wheat prices in check.

Wheat sowing has reached 32 million hectares, up 1% from last year, and is nearly complete in all major states, except for some regions in Uttar Pradesh and Bihar. Crop conditions remain favorable, and some farmers have diverted land from pulses and oilseeds to wheat.

Given the current scenario, wheat prices are expected to trade steady to weak in the near term with limited upside potential, unless buyer activity picks up significantly. Buyers are exercising caution, believing that the government will attempt to bring prices to the MSP level of Rs 2425 per quintal, and are largely staying hand-to-mouth.


(By Commoditiescontrol Bureau; +91 98201 3018)


       
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