New Delhi, February 20 (CommoditiesControl): Wheat prices in major markets exhibited mixed trends, influenced by the commencement of new arrivals and supported by spot demand driven by the ongoing marriage season. Despite the pressure from new arrivals, the demand for wheat due to the marriage season is providing support to prices.
In Indore mandi, 5000 bags of new wheat arrived, with prices quoted at INR 2400-2430 per quintal for mill quality dry and INR 2000-2300 for mill quality moisture. Lokwan new wheat traded at INR 2500-2850 per quintal. In Gondal mandi, 15000 bags arrived, and lokwan prices traded at INR 2500-3000 per quintal.
The wheat crop in Madhya Pradesh is reported to be good, with favorable weather conditions. A considerable percentage of farmers have shifted from chana to wheat this year.
Wheat sowing reached 34.2 million hectares, showing a marginal increase of 0.7% year-on-year. While sowing reduced in Gujarat (-3.9%), Rajasthan (-4.9%), and Maharashtra (-20.3%) over the previous year, it increased in Uttar Pradesh, Madhya Pradesh, and Bihar, offsetting the overall decline.
The government estimates wheat production at 114 million tons, anticipating a bumper crop due to conducive weather conditions and increased sowing. However, concerns remain regarding the potential impact of high temperatures and abnormal rainfall/hailstorms during crop maturity, as seen in previous years.
The Open Market Sales Scheme (OMSS) of wheat by the Food Corporation of India (FCI) reached a record high of 8.5 million tons, surpassing the previous highest sales of 8.1 million tons in 2018-19. The quantity offered under OMSS weekly auctions increased to 5 LMT, with a lot size of 400 MT.
The government is currently not considering a reduction in wheat import duty (40%) due to upcoming general elections in 2024. Instead, it relies on OMSS and stock limits to stabilize wheat prices. There may be potential considerations for import duty changes post-2024 elections if the procurement falls short of the target.
Delhi prices traded up by INR 100 per quintal at INR 2500 per quintal due to a good demand for maida, with maida trading up by INR 20-30 per quintal at INR 3000 per quintal. Bihar witnessed a decline of INR 20 per quintal at INR 2480 per quintal. Kolkata wheat prices traded steady at INR 2680-2700 per quintal. UP market traded up by INR 35 per quintal at INR 2485 per quintal. Rajasthan traded steady at INR 2450 per quintal. Hyderabad mill delivery traded steady at INR 2850 per quintal, and Coimbatore traded steady at INR 2900 per quintal.
Wheat prices are expected to trade steady to weak as the government aims to aggressively align prices with the Minimum Support Price (MSP). Procurement is anticipated to commence from March 10th in Rajasthan, and the new crop is showing positive signs, with potential improvements in arrivals in the coming weeks.
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