Weekly Review-Wheat

08-Feb-2025 07:36 PM

Rise in wheat prices due to demand from millers-processors

The weekly review on wheat highlights the ongoing challenges in the wheat market, including price increases, limited supply, and the impact on millers-processors.

Key takeaways include:

• Price Trends: Wheat prices have been rising in several states due to limited availability. While the price of wheat in Delhi remained stable at Rs 3100 per quintal, prices increased significantly in other regions like Indore (by Rs 116), Kota (by Rs 240), and Shahjahanpur (by Rs 100). Other mandis also saw slight price hikes.

• Limited Supply: Wheat arrivals are low in major mandis, and the sale of government wheat under the Open Market Sale Scheme (OMSS) is not enough to meet the demand from flour millers. The processing capacity of flour millers exceeds the amount of wheat offered under OMSS, forcing millers to buy from the open market.

• Government Actions: The government has increased the wheat sale quota from 25 lakh tonnes to 30 lakh tonnes under OMSS, but this hasn't significantly impacted prices. Flour is also being sold at a concessional price under the "Bharat" brand, but it hasn't helped lower wheat prices.

• Concerns for the Future: With wheat prices still higher than the government support price and limited wheat availability, the government may face difficulties in increasing wheat purchases for the central pool during the next Rabi marketing season. The high prices could further strain the supply-demand dynamics for wheat in the coming months, especially with the delayed arrival of new crops and potential crop damage due to high temperatures.

This review reflects the challenges of balancing supply, demand, and price control in the wheat market, especially with the increasing reliance on open markets.