Weekly Review-Wheat

18-Jan-2025 08:12 PM

Wheat prices soften due to weak demand at high price level

Weekly Review - Wheat (11-16 January 2025)

Overview: Wheat prices softened during the week from January 11-16 due to weak demand driven by high price levels, despite an increase in the weekly quota for open market sale. The prices remained well above the government’s support price. Wheat arrivals in major markets were limited, contributing to the price fluctuations.

Price Trends by Region:

• Delhi:
  Wheat prices for UP/Rajasthan varieties decreased by Rs 75, reaching Rs 3200-3225 per quintal. This decline is attributed to profit booking amid the high prices.

• Madhya Pradesh:
  Prices fell by Rs 50-100 per quintal. In Indore, the price dropped by Rs 80, and in Khandwa, it fell by Rs 100 per quintal.

• Rajasthan:
  Wheat prices dropped by Rs 50 per quintal in Kota and Bundi. Similarly, prices softened by Rs 40 in key markets of Uttar Pradesh. In Mainpuri, the price weakened by Rs 90 per quintal.

Sowing and Crop Outlook: Wheat sowing for the Rabi season has been completed, with an increased area of 320 lakh hectares. Strong arrivals of the new crop are expected to begin from Madhya Pradesh, though significant supply will likely start only in March.

Government Procurement: The central government has set a target to purchase 300 lakh tonnes of wheat, but it may aim for higher procurement levels. Due to the limited stock in the central pool, there is a focus on increasing purchases, particularly in states where procurement has been below expectations in recent years.

Market Outlook: While prices have softened, the decline may not be sustained. Given the volatility of the market, price increases could occur if conditions change suddenly, potentially creating a boom in wheat prices. The market remains unpredictable, and it is uncertain whether the decline phase has begun or if prices will rise again in the near future.