Mumbai, 08 Feb 2024 (Commoditiescontrol): Wheat prices displayed a stable to downward trend today, influenced by the government's decision to lower stock holding limits for traders and wholesalers to 500 metric tons, a reduction from the previous 1000 metric tons. This policy shift, coupled with the recent auction of approximately 478,000 tons of wheat under the Open Market Sale Scheme (OMSS), exerted additional downward pressure on prices.
In the Delhi market, wheat prices declined by INR 40 per quintal, settling at INR 2610 per quintal. The primary sources of supply are Uttar Pradesh and Rajasthan. Prices for Maida and Sooji were observed at INR 3040 and INR 3060 per quintal, respectively. Bran prices also weakened, dropping by INR 20 per quintal to INR 2320 per quintal, amid subdued demand for cattle feed, linked to reduced milk demand.
In Uttar Pradesh, the market closed with a decrease of INR 20 per quintal, pricing wheat at INR 2580 per quintal. The Madhya Pradesh market remained steady, closing at INR 2600 per quintal. The UP-Bengaluru line witnessed a decline of INR 20 per quintal, closing at INR 2990 per quintal.
Gujarat has started to see new wheat arrivals, with prices trading at INR 2550 per quintal.
As of February 2nd, wheat sowing reached 34.1 million hectares, marginally up by 0.6% compared to 33.9 million hectares during the same period last year. The total sowing area recorded last year was 34.32 million hectares. The increase in the Minimum Support Price (MSP) and the announcement of a bonus are key factors driving the expansion in wheat cultivation. The final sowing figures for the 2023-24 season are expected to be released by the government in the coming weeks.
Favorable weather conditions in Uttar Pradesh, Punjab, Haryana, and Madhya Pradesh are anticipated to enhance both the quality and quantity of wheat production. Despite recent hailstorms, wheat crops have not suffered significant damage as they had not reached a vulnerable growth stage.
The government reports that 80% of the wheat sown is of climate-resistant varieties, potentially offering resilience against adverse effects of phenomena such as EL-NINO during the harvest season.
The government has increased the weekly wheat offering under the OMSS auctions to 5 lakh metric tons and raised the lot size to 400 metric tons. To date, approximately 7.5 million tons of wheat have been auctioned across 32 OMSS auctions, as part of the government's strategy to stabilize retail prices by releasing food grains into the open market.
Overall, wheat prices are projected to maintain a steady to weak position, influenced by the government's regulatory measures and the influx of new crops from Gujarat and Madhya Pradesh.
(By Commoditiescontrol Bureau; +91-9820130172)
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