New Delhi, August 05 (CommoditiesControl): Wheat prices in various regions saw an uptick as uncertainty surrounding the government's Open Market Sale Scheme (OMSS) policy continued, prompting sellers to hold back in anticipation of higher prices.
In Delhi, wheat prices increased by INR 30 per quintal, driven by sellers' reluctance to sell at current rates. The delay in the OMSS notice has set off an upward trend in the market. Fresh wheat from Rajasthan (Kota, Bundi region) traded higher by INR 10 per quintal, selling for INR 2690 per quintal overall. In Bengaluru, the market saw a rise of INR 5 per quintal, reaching INR 2925 net, while Madhya Pradesh wheat prices increased by INR 10 per quintal to INR 2660 (ex warehouse).
In Uttar Pradesh, wheat prices remained strong, trading up by INR 15-25 per quintal, reaching INR 2615-2625 per quintal. Uttarakhand's trade price also saw an increase, staying at INR 2635, up by INR 20 per quintal. Kolkata maintained a consistent price of INR 2765 per quintal. A quintal of Bihar wheat sold for INR 2630, and Goa mill supply rates remained constant at INR 2900 per quintal.
The lack of clarity on the OMSS policy has left market players in doubt, causing some millers to aggressively seek wheat to protect their supplies. As a result, wheat prices have increased by INR 10–15 per quintal in key regions. Traders believe that the government might delay the introduction of the OMSS policy, which has bolstered the optimistic sentiment in the market.
Despite higher rates, sellers are not particularly active, given the current limited physical supplies. This scenario suggests that wheat prices are likely to climb further in the near future. If the government releases OMSS stockpiles at INR 2300 per quintal, mill delivery wheat prices are expected to be INR 2550-2560 per quintal, although there is no formal notice regarding the INR 250 per quintal that will be returned to millers.
Buyers are actively seeking physical wheat supplies due to the limited supply from the Food Corporation of India (FCI). While wheat tenders were not issued, FCI launched rice tenders for an open market sales program, indicating that the government might not be keen on launching a wheat open market sales policy soon.
Many millers and dealers believe that the government notification will not be forthcoming, as it has not been received thus far. Seasoned traders and millers think the government would focus on one policy at a time to control prices, given the poor stock position. They might delay selling wheat through OMSS since they are already implementing the "Bharat Atta" policy. Based on current calculations, FCI has 5.5 million tons for OMSS this year, compared to 10 million tons last year. Additionally, the government has allocated two million tons for an exigency buffer.
A food ministry official stated that sales of Atta (wheat flour) and rice under the Bharat brand, scheduled to run until June 30, 2024, would continue. The government is expected to apply the OMSS policy this year but may start late to sell smaller volumes.
With the festive season approaching, the offtake of processed wheat is expected to rise, and given the already limited physical market supplies, wheat prices are likely to increase in the near term.
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