Wheat Prices Remain Steady to Firm Amid Tight Supply and Aggressive Auction Bids

New Delhi, December 4 (CommoditiesControl): Wheat prices traded steady to firm today as bids in the Open Market Sale Scheme (OMSS) auctions surpassed reserve prices, reflecting strong demand amid limited supply.

Auction Highlights
The government provided around 1 lakh tons of wheat in the December 4 OMSS auction. Winning bids across states significantly exceeded the reserve price of ₹2,325 per quintal, with rates varying as follows:
- Highest Bids: Assam (₹3,219), West Bengal (₹3,161), Odisha (₹3,122).
- Lowest Bids: Maharashtra (₹2,489), Tamil Nadu (₹2,565).

The aggressive bidding, driven by millers operating on minimal stocks, suggests continued support for wheat prices in the near term.

Spot Market Prices
- Delhi: Up by ₹20 at ₹3,130 per quintal.
- UP and MP: Steady at ₹2,930–₹2,940 per quintal.
- Rajasthan, Gujarat, and Bihar: Held steady at ₹2,935–₹2,940 per quintal.
- South India: Stable at ₹3,320 per quintal.

Sowing Progress
As of November 29, wheat sowing has reached 20 million hectares, up from 18.8 million hectares during the same period last year. This increase highlights farmers shifting from mustard and groundnut to wheat and pulses.

Government Measures and Stock Position
- PDS and OMSS: With 10 million tons of wheat already released in PDS out of an allocated 21.7 million tons, an additional 1.7 million tons could be diverted to OMSS if off-take remains low.
- Imports: High import duties (44%) render wheat imports unviable. While a reduction in duty could stabilize prices, the government is unlikely to act before December 15 to avoid impacting sowing sentiment.
- Stock Concerns: Current government stocks are near buffer norms, raising concerns about managing food inflation if adverse weather impacts future harvests.

Outlook
- Wheat prices are expected to remain volatile, influenced by government policies and OMSS allocations.
- Prices may recover in the short term but are unlikely to see sharp increases due to the possibility of higher government releases.
- Stable international markets, buoyed by Australia’s bumper crop, contrast with domestic supply constraints, keeping prices elevated.

Farmers and millers are advised to monitor government actions closely, as these will be critical in determining price trends in the coming weeks.

(By Commoditiescontrol Bureau; +91 98201 3018)