New Delhi, May 17, 2024 (Commoditiescontrol): Wheat prices across major centers have remained almost steady to firm in recent sessions, supported by slower-than-expected arrivals and concerns over government procurement. Today, prices were quoted firm, witnessing an increase by INR 10-25 per quintal across major centers.
The Indian government has procured 25.7 million tons of new-season wheat from farmers, but traders and industry officials express skepticism regarding the Food Corporation of India's (FCI) ability to achieve its procurement target of 30 million tons.
In Uttar Pradesh (UP) mandis, wheat prices were firm, up by INR 20 to INR 2330 (loose) today, as private traders resumed purchasing wheat. Arrivals at Hardoi mandi were observed at 20,000 bags, with government procurement slowing down. Active buyer participation indicates a likelihood of steady to firm wheat prices in the near term.
Comparatively, arrivals in UP mandis are down by 20-40% compared to the previous year, despite expectations of good wheat production in the state. The lackluster government procurement in UP suggests that farmers and small stockists are holding onto their stocks.
In Madhya Pradesh (MP), wheat sentiments are strengthening as mandi arrivals remain weak. Government procurement in MP is falling short of requirements, and reports of government selling wheat in the open market further bolster market sentiments.
South Indian millers, particularly in Bengaluru, are active buyers, with trades from the Satna zone reported at INR 2920 (4% CD, 101 kg). Loose wheat prices in Satna are quoted at INR 2300, with additional charges. Ex-spot prices in Satna stand at INR 2380. However, farmers in Satna are hesitant to sell at current rates, making a decline in mandi prices unlikely. This situation may prompt South Indian millers to increase prices to procure wheat from the MP zone in the near term.
With wheat procurement currently at 257 lakh tons, major pressure on wheat prices due to government intervention appears challenging. Prices are expected to trade steady to firm by INR 50-100 per quintal in the near to medium term. However, the market remains cautious, as most stocks are held by relatively weak hands such as farmers and small traders.
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