Wheat Prices Hold Steady Amid Policy Speculation and Sluggish Demand

Mumbai, September 4 (CommoditiesControl): Wheat prices have remained stable today as the market grapples with uncertainty surrounding potential government interventions. Rumors that the government might introduce a uniform wheat pricing scheme across India have contributed to this price stability. Traders are also wary of possible transportation costs exceeding reserve prices and are cautious in their buying strategies due to the anticipated implementation of the Open Market Sale Scheme (OMSS).

According to recent reports, the government plans to release over 10 lakh tons of wheat from its reserves starting in October. This is part of a broader allocation of more than 55 lakh tons for weekly tenders under the OMSS this year, translating to approximately 2.5 lakh tons per week. However, this allocation is notably lower than what is required, leading to speculation that significant price changes might not occur unless the government adjusts its weekly sales to around five lakh tons.

The delayed start of the OMSS, now expected in October rather than September, may provide additional support to wheat prices. Last year, during the festive season, around 16 to 20 lakh tons of wheat were sold monthly, making this year's OMSS allocation of 10 lakh tons seem relatively modest by comparison.

In current market conditions, wheat prices are reported to be INR 28,000 per ton in Delhi. In Rajasthan’s Kota and Bundi districts, prices hold steady at INR 27,200 per ton, while Bengaluru sees a price of INR 30,300 per ton for mill-supplied wheat. The Madhya Pradesh market has experienced a slight decline, with prices now at INR 27,200 per ton, down by INR 100 per ton. Uttar Pradesh prices remain at INR 27,250 per ton, and Uttarakhand prices are steady at INR 27,350 per ton. Kolkata wheat prices are also stable at INR 29,450 per ton.

The slow consumption of processed wheat products, combined with ongoing uncertainty about the OMSS, has created a level of resistance in the market. As domestic demand is projected to increase over the next five to ten days if OMSS is not implemented promptly, wheat prices are expected to receive substantial support. Looking ahead, the domestic demand outlook for November and December appears promising, which could further reinforce price stability.