Wheat prices expected to remain high due to limited stock and strong demand

29-Oct-2024 06:29 PM

New Delhi. Due to limited supply and strong demand in important mandis of major producing states of the country, the price of wheat is running much higher than the government support price and there is no possibility of much softening in it in the near future.

The minimum support price (MSP) of wheat for the 2023-24 season was fixed at Rs 2275 per quintal, which was Rs 150 more than the support price of Rs 2125 per quintal for the 2022-23 season. Now once again for the 2024-25 season, its support price has been increased by Rs 150 to Rs 2425 per quintal.

Due to the festive season, the demand for wheat is seen to be very strong. Millers-processors have to depend on wholesale mandis for the supply of wheat as the government has decided not to start the sale of wheat from its stock under the Open Market Sale Scheme (OMS) for the time being.

There is a new weighed stock of wheat in the central pool itself, so the government is not able to sell it at a liberal rate.

This is considered to be a major reason for the rise in prices because the government will not be able to start the market intervention scheme. Anyway, it is believed that there has not been an unexpected increase in the price of wheat yet and except for a few mandis, its price is running between Rs 2600/2800 per quintal in most markets.

The price of Swayam Bharat brand government flour has been increased from Rs 275 to Rs 300 per 10 kg (Rs 30 per kg). Availability in the mandis is weak and demand is strong.

Storage limit (stock limit) is applicable on wheat while the situation is not favorable for its import from abroad because a heavy customs duty of 40 percent is applicable on it.

Until the government wheat is available to the millers-processors, the wholesale market price will remain strong.

It is normal for the price to fluctuate by 50-100 rupees per quintal, but there is no possibility of a huge fall. Nevertheless, traders-stockists and producers should continue selling their wheat.