Wheat prices head north with the advent of 'Navratri' festivities

Trade and market sources said wheat prices in wholesale markets of Delhi have risen by around Rs 40 per quintal since September 1

With the advent of Navratri festivities, wheat prices in North Indian markets have started to firm up even as flour makers are busy replenishing their inventories.

This could complicate the Centre’s decision to extend the free foodgrains distribution scheme beyond September 30, which, though, the government seems to have decided in favour of.

Demand for atta (wheat flour) and other wheat-related products such maida and sooji usually goes up during festival days because various home-made delicacies are made from them.

Trade and market sources said wheat prices in wholesale markets of Delhi had risen by around Rs 40 per quintal since September 1 with almost 75 per cent of the increase happening between September 24 and September 26.

In the Lawrence Road market of Delhi, wheat prices on September 26 were in the range Rs 2,520-2,540 per quintal. On September 1, they were Rs 2,480-2,500 per quintal.

Similarly, in the main markets of Madhya Pradesh, such as the districts of Indore, Mandsaur, Dabra, Gwalior, and Seoni, wheat prices have firmed up after being stable for some months.

In UP too, they have started rising in the past few days, mainly from September 22, with prices going up by Rs 20-30 per quintal, traders said.

A big reason for the increase in wheat prices, according to traders, is the near absence of open market sales from state-run inventories, which used to keep prices within check in previous years.

“This year most flour millers and even makers of maida and sooji are dependent entirely on the wheat available with private traders. This is supporting the markets as demand for wheat products usually goes up during Navratri,” a senior industry official said.

Rahul Chauhan, a commodity analyst with iGrain India, said wheat prices would get support from flour makers, who would have to replenish their inventories.

Meanwhile, the wheat stock in the Central pool as on September 1 was 24.82 million tonnes, according to the data provided on the Food Corporation of India (FCI) official website.

This is around 4.82 million tonnes more than the operational buffer and strategic reserve requirement of 20.50 million tonnes as on October 1 of each year.

In 2021-22, wheat distribution (public distribution system and Pradhan Mantri Garib Kalyan Yojana taken together) was 43 million tonnes while for rice it was 53 million tonnes.

This year (2022-23), based on the current allocations for the Pradhan Mantri Garib Kalyan Yojana, traders are projecting the share of rice will be 16 million tonnes more, with an equal decline in the share of wheat.

Assuming a monthly consumption of wheat of 2-2.5 million tonnes through the public distribution system and Pradhan Mantri Garib Kalyan Yojana after its share is lowered in favour of rice, the Centre might still have enough to meet its buffer requirement at the end of March 31, 2023, traders said.