Weekly Review-Wheat

28-Dec-2024 07:39 PM

Wheat prices rise due to good demand from buyers with limited arrivals

Weekly Review - Wheat Prices and Market Update (21–27 December)

Wheat prices have seen an increase due to strong demand from buyers, coupled with limited arrivals in wholesale markets during the off-season. Despite a good increase in the total wheat sowing area during the current Rabi season, farmers had initially been concerned about the lack of rain in key wheat-producing areas. However, recent rains have alleviated these worries to a great extent, which is expected to have a positive impact on future crop yields.

Sales and Supply Situation

Under the open market sales scheme by the Food Corporation of India (FCI), around 1 lakh tonnes of wheat is being sold to flour millers and processors every week. However, this quantity has not been enough to meet the growing demand. Consequently, the dependence on open market supplies remains high. The supply is limited, especially during the off-season, and wheat arrivals in the wholesale markets are restricted, even though buyer demand continues to be strong.

Price Movements

During the week of 21 to 27 December, wheat prices saw an upward movement in key markets:

• Delhi: Wheat prices from Uttar Pradesh (UP) and Rajasthan increased by Rs 40, reaching Rs 3130-3140 per quintal.
• Madhya Pradesh: Prices in Dewas and Khandwa rose by Rs 100 per quintal, while Indore and Bundi saw an increase of Rs 40.
• Rajasthan: Kota saw a price rise of Rs 100 per quintal.
• Other Regions: In Uttar Shahjahanpur, prices increased by Rs 50, and in Gorakhpur, by Rs 40.

Prices remained stable in Gujarat's Gondal and Rajkot mandis, but in other states like Madhya Pradesh, Rajasthan, and Uttar Pradesh, the upward trend was prominent.

Stock Situation

Although the wheat crop is generally considered normal, stockists and producers have limited supplies, which are being gradually unloaded in the mandis. This limited availability, coupled with ongoing demand, is contributing to the price increase.

Arrival and Future Outlook

Wheat arrivals in Delhi varied between 1250 to 3750 bags per day, but on 27 December, arrivals nearly halted due to adverse weather conditions. Similar pressures on wheat arrivals were observed in other mandis. Given the tight supply and strong demand from millers and processors, the market situation is expected to remain complex in the coming weeks. If demand continues at its current pace, wheat prices may see further increases.