NEW DELHI (Commoditiescontrol) - Wheat prices in Delhi are getting support from strong demand. Stockists are aggressively buying wheat in the market. Stockists normally build up huge stock in order to balance the market during off-season, to begin from July. As per market sources, stockists would hold more than five lakh tonnes of wheat this year.
Delhi is a such market where more than 70 percent of the consumers buy flour instead of wheat. So, flour mills have to source wheat during the entire year. Although, most of the flour mills buy wheat directly from market and Food Corporation of India (FCI) under government’s Open Market Sale Scheme (OMSS), they buy wheat from stockists also to fulfill their urgent needs.
Mr. Rajesh Jain, a trader from Lawrence Road whole sale market told commoditiescontrol.com that more than five lakh tonnes of wheat will be held by stockists. Normally, middle and small sized traders buy and stock wheat for off-season. They buy around 5,000-10,000 bags of wheat to store, as per their financial capacity. Currently, mill quality wheat is available at Rs. 1,500-1,550/100kg. After 3-4 months, stockists will be able to earn profit of Rs. 100-150/100kg.
Wheat prices are expected to touch Rs. 1,600-1,700/100kg by then. Mr. Jain said that stockists supply wheat to consumer industries specially flour mills during their sudden needs as they have to run their plants. Flour mills do not get wheat smoothly at all times. When they do not get wheat from scheduled source like open market or FCI, they have to buy from stockists. Taking advantage of the situation, stockists charge premium to fulfill millers’ need immediately.
According to market estimates, total daily supply of wheat is around 30,000-40,000 bags in each wholesale market in Delhi. Lawrence Road, Shahdara, Najafgarh, Narela and Alipur are the major markets where wheat is being supplied currently. Delhi is getting wheat from western Uttar Pradesh, Haryana, Rajasthan and Uttarakhand. Nevertheless, overall demand is good, hence prices rise. Mr. Jain said that prices gained around Rs. 30-35/100kg in the last 10-15 days as flour mills and stockists are purchasing equally.
Mr. Uttam Chand Jethwani, a wholesale trader from Kota also echoed the same. He said that daily supply of around 10,000-15,000 bags are being supplied from Rajasthan to Delhi. Demand in wheat is good, therefore traders from Rajasthan are keen to supply.
Commenting on price rise prospect, Mr. Jethwani expects prices to surge when supply decreases in the days to come. Arrivals have already started declining, backing the uptrend in prices. But he cautioned that prices will depend on government’s policy. It will move according to the prices fixed by the government for wheat to be sold under OMSS.
(By Commoditiescontrol Bureau; +91-22-40015533)
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