Wheat Prices Weaken Following Govt's Imposition of Stock Limits

New Delhi, June 24 (Commodities Control): Wheat prices across major centers traded weak on Monday following the Indian government's recent imposition of stock limits aimed at curbing hoarding and stabilizing the market. The new regulations have made buyers hesitant to purchase at current rates, while sellers are also showing weakness at lower prices.

In a decisive move, the Government of India has set stock limits for wheat. Wholesalers can hold a maximum of 3,000 tons, retailers are limited to 10 tons, and big chain retailers are also restricted to 10 tons per outlet. For processors, the stock limit is set at 70% of their monthly installed capacity multiplied by the remaining months of the financial year.

Additionally, all big chain retailers, wholesalers, and stockists are required to declare their stocks every Friday on the Food Ministry's portal. The government is also contemplating a reduction in import duties on wheat to further stabilize supply and control prices.

In Delhi, wheat prices fell by INR 20 per quintal to INR 2,660 per quintal. Rajasthan's new wheat remained steady at INR 2,650-2,660 per quintal. In Bengaluru, prices decreased by INR 20 per quintal to INR 2,900 per quintal (net). In Madhya Pradesh, prices dropped by INR 20-30 per quintal to INR 2,610-2,620 per quintal ex warehouse. In Uttar Pradesh, prices decreased by INR 20-30 per quintal to INR 2,550 per quintal. Uttarakhand saw prices fall by INR 20 per quintal to INR 2,580 per quintal. In Gujarat, prices dropped by INR 20-30 per quintal to INR 2,640-2,650 per quintal. Kolkata prices fell by INR 10 per quintal to INR 2,740 per quintal. Bihar prices decreased by INR 10-20 per quintal to INR 2,550-2,560 per quintal. Goa mill delivered rates fell by INR 10 per quintal to INR 2,890 per quintal.

Black Sea CNF quotes are at USD 270 per ton, and after accounting for local freight and CHA charges (INR 3,000 per ton), mill delivered prices are at INR 25,600 per ton. Global prices have softened by 3-4% due to Turkey's import ban and a slight improvement in Russian crop forecasts by 0.5 million tons. With the potential reduction in import duty, imports of around 2-3 million tons could easily arrive at South Indian ports.

Most stockists anticipated the stock limit imposition and are already holding stocks below 3,000 tons, mitigating any significant price impact from this limit.

Some Bihar-based buyers, who had paused purchasing in the afternoon session, resumed activity in the evening by reducing prices by INR 20-30 per quintal. After the recent decline of INR 20-30 per quintal, wheat prices are expected to recover. However, buyer activity at higher rates is expected to remain subdued, especially with the government indicating a possible reduction in import duties if necessary.