New Delhi, May 23 (Commoditiescontrol): Wheat prices continued to climb across major trading zones in India today, driven by supply constraints due to declining arrivals in major production areas. Over the past 10 days, wheat prices have increased by an average of INR 50-70 per quintal, reflecting a short-term mismatch between supply and consumption demand for processing.
- Delhi: Prices rose by INR 20 per quintal, reaching INR 2530 per quintal.
- Rajasthan: New wheat prices increased by INR 20 per quintal, trading at INR 2590 per quintal.
- Bengaluru: Prices were up by INR 10 per quintal, reaching INR 2880 per quintal (net).
- Madhya Pradesh: Prices increased by INR 20 per quintal, trading at INR 2600 per quintal ex-warehouse.
- Uttar Pradesh: Prices rose by INR 20 per quintal, reaching INR 2480 per quintal.
- Gujarat: Prices increased by INR 20 per quintal, trading at INR 2620 per quintal.
- Shahjahanpur Mandi, UP: Prices increased by INR 10 per quintal, reaching INR 2370 per quintal. Arrivals were significantly lower than expected, at 3500 quintals compared to the 8000-10000 quintals during the same period last year.
The ongoing supply constraints are exacerbated by reduced arrivals in key production zones like Punjab and Haryana. Despite expectations of good wheat production in Uttar Pradesh, mandi arrivals are down by 20-40% compared to last year. The government's procurement target of 6 million tons in UP is likely to fall short, with only about 1.2 million tons expected to be procured.
As of May 22, wheat procurement reached 26.2 million tons, significantly below the target of 37.2 million tons. FCI officials anticipate procuring around 27 million tons. The declining arrivals and government procurement challenges are contributing to the upward pressure on prices.
International wheat prices have surged by over 15% in the last 10 days, with Ukraine-Russian import CNF quotes now at USD 295-300 per ton. If India removes the import duty, CNF quotes could rise by USD 10-15 per ton, making imports at ports around INR 2750-2800 per quintal. Adding freight and CHA charges would push the delivered cost to INR 2950-3050 per quintal. Given the global market conditions and the time required for imports, any significant relief from international supplies is unlikely in the short term.
Rumors suggest that the Government of India may discontinue the distribution of Bharat Atta after June 30th, replacing it with Bharat Wheat available through PDS shops. The government may also adjust the wheat-rice ratio in PDS schemes to manage wheat stocks more effectively.
Despite these challenges, millers are unable to pass on the increased wheat prices to consumers due to reduced demand amid prevailing heat wave conditions. However, demand for processed wheat products is expected to improve with the onset of the monsoon and the festive season starting from June end/July.
With current trends and the sharp rise in global wheat prices due to unfavorable weather conditions in Russia and Ukraine, the wheat market in India is expected to remain firm. Any major decline in prices seems unlikely, and wheat prices are anticipated to stay steady to firm in the near term, potentially rising by INR 75-100 per quintal.
Overall, wheat market sentiments are strong in the medium to long term, driven by persistent supply constraints, robust global prices, and expected demand recovery.
0 Comments 
Post Comment 
