New Delhi, February 16 (CommoditiesControl): Wheat prices continued to exhibit a steady to weak trend as the market faced pressure from rising Open Market Sale Scheme (OMSS) supplies and optimistic expectations for the upcoming new crop.
In Indore mandi, 2,500 bags of new wheat arrived, with prices quoted at Rs 2,500-2,550 for mill quality. Lokwan new wheat was quoted at Rs 2,600-2,690. Despite the arrival of new wheat, the overall sentiment remained under pressure.
The Food Corporation of India (FCI) recorded record-high wheat sales, reaching 85 lakh tons. These sales under OMSS exceeded the previous record of 81 lakh tons in 2018-19. Buyers from the north zone dominated the purchases, acquiring the highest amount of wheat at 257,540 tons out of the 263,000 tons offered by FCI. The decrease in the average buying rate in FCI auctions indicates that buyers are securing wheat supplies at relatively lower rates.
Regional wheat prices witnessed declines. In Delhi, prices traded down by Rs 25 per quintal to Rs 2,475 per quintal, while Bihar experienced a decrease of Rs 30 per quintal, trading at Rs 2,530 per quintal. Kolkata's wheat prices declined to Rs 2,670 per quintal, down by Rs 20 per quintal due to an increase in OMSS supplies in local markets.
In the UP market, prices traded down by Rs 20 per quintal at Rs 2,480 per quintal, and demand from Southern Millers remained muted. The UP-Bengaluru line traded at Rs 2,930 per quintal, down by Rs 20 per quintal. Rajasthan also experienced a decline of Rs 25 per quintal, trading at Rs 2,475 per quintal. The MP market traded at Rs 2,500 per quintal, down by Rs 40 per quintal, with OMSS supplies putting pressure on prices.
Black Sea wheat was reported to be traded at CNF 275 per ton, remaining steady due to low export demand. A healthy parity of USD 30-40 per ton is noted if India opens up imports this year.
Considering that the Minimum Support Price (MSP) of new wheat is at Rs 2,275 per quintal, and the government starts procurement at that rate, mandi prices may decline to the range of Rs 2,250-2,275 from the current Rs 2,400-2,425 range. However, if the government provides a bonus for procurement, prices may not decline significantly.
With the revised wheat stock limit applicable until March 31, 2024, major stock buildup is unlikely to occur by bulk stockists until then. Consequently, wheat prices are anticipated to trade weak in the near term.
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