Weekly Review - Wheat

21-Dec-2024 07:07 PM

Mixed Trend in Wheat Prices Due to Government Sales and Demand from Millers

Overview: Wheat prices experienced mixed movements during the week of December 14-20. Despite significant government sales through weekly e-auctions, millers continued to drive demand, resulting in both price increases and declines in various regions.

Government Auctions: The Food Corporation of India (FCI) conducted three weekly e-auctions under the Open Market Sale Scheme (OMSS), offering 100,000 tonnes of wheat per auction. Millers and processors dominated the purchasing, buying up to 98-99% of the offered quantity, showcasing sustained interest in government wheat.

Market Dynamics: Despite the steady demand for government wheat, the overall demand for wheat in major wholesale markets was also strong. However, due to limited arrivals during this off-season period, prices generally saw an upward trend in many markets, while in others, they weakened.

Price Movements:

• Declines:

  • Wheat prices in Delhi, from Uttar Pradesh and Rajasthan, dropped by Rs 10 to Rs 3070 per quintal.
  • Rajkot (Gujarat) and Dabra (Madhya Pradesh) saw a reduction of Rs 50 each, while Dewas experienced a Rs 100 decline per quintal.

• Increases:

  • In many other mandis of Madhya Pradesh, Rajasthan, and Uttar Pradesh, wheat prices rose.
    • Bhopal saw a Rs 100 increase.
    • Indore saw a rise of Rs 80, while Khandwa rose by Rs 50, and Itarsi by Rs 40.
    • Kota (Rajasthan) and Bundi rose by Rs 50 and Rs 25 per quintal, respectively.
  • Wheat prices improved in mandis like Shahjahanpur, Hardoi, Sitapur, and Etah (Uttar Pradesh), while Gorakhpur and Gonda saw declines of Rs 70 and Rs 10, respectively.

Arrival Trends: Wheat arrivals were limited in most mandis, consistent with the off-season supply pattern. This scarcity, coupled with consistent demand from millers and processors, contributed to price fluctuations.

Government Purchases: Government wheat purchases remained capped at 100 tonnes per week, or 400 tonnes monthly. This limit is insufficient for larger flour mills and processing units, pushing them to rely on the open market to meet their requirements. As a result, smaller millers may see a reduction in their purchases.

Conclusion: Wheat prices showed mixed movements in various regions due to a combination of government sales and ongoing demand. While some areas saw price increases, others experienced declines, reflecting the complex dynamics of limited arrivals and robust demand from millers.