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Wheat Prices Hold Steady Amid Balanced Supplies and Awaited Govt Policies

28 Nov 2023 8:52 pm
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New Delhi, November 28 (CommoditiesControl): Wheat prices have sustained stability across major centers as current supplies remained sufficient to meet present demand. Both buyers and sellers remain in a cautious "wait and watch" stance, eagerly anticipating more cues from new sowing figures and potential government interventions.

As of November 24, 2023, wheat sowing has reached 14.2 million hectares, reflecting a 5% year-on-year decline. This dip is attributed to delays in the harvesting of paddy and sugar in key wheat-growing states such as Punjab, Haryana, and Uttar Pradesh.

The decrease in wheat planting is expected to persist or possibly decline further by 3-4% year-on-year, with some farmers opting for less water-intensive crops like pulses due to lower soil moisture.

Concerns are also mounting for winter crops like wheat and rapeseed, with the possibility of higher temperatures during December to March potentially impacting yields and consequently affecting wheat availability in the coming year.

In the domestic market, Delhi wheat is holding steady at Rs 2700 per quintal, while UP wheat prices are trading at Rs 2600-2610 per quintal. Rajasthan witnesses wheat prices ranging from Rs 2630-2650 per quintal, MP at Rs 2670-2680 per quintal, and Gujarat at Rs 2670-2680 per quintal. The southern market, driven by robust demand during the marriage season, remains stable.

However, concerns about wheat availability prompt the government's involvement in regulating retail prices through open market sales. Approximately 3.9 million tons have been auctioned in the last 22 Open Market Sale Scheme (OMSS) auctions.

Internationally, Black Sea prices are trading at USD 275 CNF for India. Mill-delivered wheat prices for imported wheat at Tamil Nadu/Bengaluru mills are reported at Rs 2625 per quintal. Despite a significant parity with current domestic rates, the Government of India is currently refraining from wheat imports to control prices.

With the government's existing stock position weakening and the possibility of another weak crop, there is speculation that the Indian government may need to explore options such as importing wheat to effectively manage and stabilize wheat prices in the market.

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