New Delhi, September 3 (CommoditiesControl): Wheat prices remained steady today as market participants weighed rumors that the government may offer wheat at a uniform rate across India. Previously, unconfirmed reports suggested that the government might add transportation costs on top of reserve prices, potentially putting medium-term pressure on wheat prices. Buyers are currently cautious due to the possibility of the government implementing the Open Market Sale Scheme (OMSS) policy soon, which has also led to sluggish off-take of processed wheat products, creating upward resistance.
According to media sources, starting in October, the government plans to release over 10 lakh tons of wheat per month from its official reserves. For weekly auctions under the OMSS this year, the government has allocated over 55 lakh tons, equating to approximately 2.5 lakh tons per week. This volume is considerably less than what is needed to significantly impact prices. If the government were to release 5 lakh tons per week, it might have a more pronounced effect on the market. However, even a small supply through auction sales could drive prices higher due to competitive bidding for the limited available wheat.
The new Bharat policy stipulates that Bharat Atta and Bharat Rice will be sold in 5 kg and 10 kg bags. Distribution to individual millers could be capped at 7,500 metric tons, subject to agencies' satisfactory compliance. Although many expected the OMSS to begin in September, it is now anticipated to start in October, which might support prices further. Last year, approximately 16 to 20 lakh tons were sold each month during the festive season, making the planned 10 lakh tons per month through OMSS seem relatively low.
In the current market, Delhi wheat traded steady at INR 2,800 per ton. Wheat from Kota and Bundi districts in Rajasthan remained stable at INR 27,200 per ton. In Bengaluru, rates were consistent at INR 30,300 per ton (mill supplied), while the MP market saw a decrease of INR 100 per ton, trading at INR 27,200 per ton. Uttar Pradesh wheat held steady at INR 27,250 per ton, and Uttarakhand's market price remained neutral at INR 27,350 per ton. Kolkata prices increased by INR 50 per ton to reach INR 29,450 per ton.
Given the current situation, if the OMSS is not announced soon, domestic demand for wheat is expected to rise in the next five to ten days, potentially providing strong support to prices in the near term. The outlook for November and December appears promising, with anticipated robust domestic demand likely to bolster wheat prices.
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