Weekly Review-Wheat

15-Feb-2025 07:48 PM

Huge rise in wheat prices due to strong demand from millers-processors


It seems like wheat prices have been rising sharply due to strong demand from millers and processors, coupled with low arrival rates in wholesale markets. Here's a summary of the key points:

  1. Price Increase: Wheat prices saw a notable increase of Rs 100-200 per quintal in the week of 8-14 February, largely driven by strong demand and low arrival rates in markets.

  2. Regional Variations:

    • Delhi: Prices from Uttar Pradesh (UP) and Rajasthan saw a Rs 205 rise, reaching Rs 3300-3325 per quintal.
    • Madhya Pradesh & Gujarat: Prices in Indore rose by Rs 216 to Rs 2950-3560 per quintal, while other regions like Dabra saw an increase of Rs 190, reaching Rs 3230-3240 per quintal.
    • Rajasthan: Wheat prices in Kota and Bundi rose by Rs 190-250, reaching Rs 3150-3350 and Rs 3000-3200 per quintal, respectively.
    • Uttar Pradesh: Wheat prices increased by Rs 100-170 per quintal, but in Jalna (Maharashtra), prices decreased by Rs 100 to Rs 2700-3400 per quintal.

  3. Government Response:

    • The Food Ministry has doubled the quantity of wheat under the open market sale scheme, increasing the weekly offer from 1.5 lakh tonnes to 3 lakh tonnes, hoping to curb the rising prices.
    • The government is concerned that high wholesale prices could impact the procurement of wheat for the central pool.

  4. Stocks:

    • The central pool is running low on wheat stocks, with ongoing withdrawals that are not decreasing. This is contributing to market concerns.
    • The government has set the minimum support price (MSP) for wheat at Rs 2425 per quintal, with an additional Rs 125 per quintal bonus in Rajasthan and Madhya Pradesh, raising the effective MSP to Rs 2550 per quintal.
    • Despite this, market prices are higher than the MSP, indicating that wheat prices are continuing to rise in the wholesale markets.

  5. Outlook:

    • Harvesting: Harvesting of early wheat crops is expected to start next month in some states, with the pace picking up in April, which could affect prices.
    • The current market conditions indicate a bullish environment for wheat prices in the near term.

It looks like the market dynamics are really heating up, with strong demand and limited supply driving prices higher.

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