Wheat may see distress sale
MARKET OUTLOOK
| Wheat prices in the physical market are likely to move down by Rs 25-30 a quintal, while prices of rice and pulses are set to rise on good demand. Prices of pulses are expected to soar by Rs 100 a quintal following a rising consumer demand. Rice prices are also likely to remain firm amid a lower rabi output. |
| "To protect wheat from fungus and Susri "" an insect that attacks the grain during the monsoon "" stockists release their holdings, leading to distress sale during the season, especially in Punjab. This year, too, we expect a distress sale by individual farmers, who accumulatively hold about 15 lakh tonnes in Punjab alone," said Amritsar-based Vimal Sethi of Pooja Trading Corporation. |
| Wheat, which is currently quoting at Rs 1,050 a quintal in Amritsar "" a rise of Rs 25 over the last fortnight's prices "" may decline slightly in the coming week on the distress sale by farmers. However, the drop would be for a short term and prices were likely to firming up from the August-end and touch the last year's peak of Rs 1,200 a quintal towards the year-end despite the government's much-awaited 1 million tonnes imported wheat, he added. |
| The government, in its fourth advanced estimates, has pegged the wheat production at 74.89 mt compared with 73.7 mt last year, an increase of 8 per cent or 5.4 mt, over the previous year's low harvest of 69.35 mt. |
| D Manikchand, the managing director of Panchaganga Roller Flour Mills, said multinational companies would determine wheat prices because of their holding capacity. |
| Meanwhile, arrivals of rice have started in Punjab. But, consumers are not expected to get any respite from high prices. The revised numbers put the rice output in 2006-07 at 92.76 mt, about 1.1 per cent higher than 91.79 mt according to the final estimates for 2005-06. |
| The estimates put out in April had indicated a decline of 0.8 per cent in the rice output. The rabi crop turned out to be 12.65 mt compared with 13.52 mt last year, showing a decline of 6.4 per cent. The good quality non-basmati rice is, currently, quoted between Rs 1,400 and Rs 2,200 a quintal in retail physical markets across the country. |
| Among pulses, tur is likely to trade firm by Rs 150 a quintal over its current level of Rs 2,550 a quintal in Latur. Some amount of crop damage has been reported in Maharashtra and Karnataka because of heavy rainfall, which may dent production. In the case of urad, however, analysts hesitate to project any picture in the absence of crop data. Analysts expect urad prices to remain steady in the coming week. |
| Confusion persists over the chana crop estimates. But the strong demand is likely to drive prices up. Chana prices are likely to trade firm in the coming week and settle between Rs 2,450 and Rs 2,475 a quintal, a rise of Rs 25-50. |
| According to the government estimates, the production of pulses may increase by 6.3 per cent to 14.23 mt this year compared with 13.39 mt in the corresponding period last year. |