Price Hikes Driven by Government Announcements

In the past five days, wheat prices have jumped by USD 0,39 per kg in India. This spike follows government officials clarifying that there’s no immediate need to sell wheat in the open market or import it. In Mumbai, mill-quality wheat trades between USD 0,39 and USD 0,47 per kg, while premium varieties have reached USD 0,52 per kg. As demand for wheat rises in 11 states ahead of Diwali (a festival in India), market activity has intensified, pushing prices higher.

Confusion Over Wheat Production Estimates

Government figures on wheat production have left traders questioning the accuracy. While official estimates placed the wheat harvest at 112 million tonnes. Traders argue that the actual figure didn’t exceed 100 million tonnes. Currently, traders hold 9,5 million tonnes of wheat, and another 23 million tonnes remain in government warehouses. These discrepancies raise questions about the government's consumption and export figures.

Despite last year’s challenges, including 28 rounds of harvesting between February and April, the government remains optimistic. Farmers expect to benefit from an increased minimum support price (MSP). And the government aims to meet its target of 120 million tonnes of wheat this year. However, with planting delayed due to heavy rains, seed shortages might continue to drive prices higher. As cultivation is expected to start 10 to 15 days late.

Short Supply Keep Prices Up for Miller Quality

Miller-quality wheat prices remain high, driven by limited supply and the government’s decision to withhold open-market sales. In Delhi, prices have now surpassed USD 0,39 per kg. And analysts predict they could rise by another USD 0,06 to USD 0,12 per kg before Diwali. Demand from mills continues to push prices higher, while the market waits to see if the government will release more stock.

Due to tight supplies;

• Lokvan wheat prices in warehouses stand at USD 0,39 per kg,
• Milbar wheat is priced between USD 0,37 and USD 0,39 per kg.

The market has experienced a steady increase of USD 0,06 per kg in the past two weeks, and traders expect this slow growth to persist as demand for wheat seeds rises.

Wheat Prices Expected to Climb Further in Delhi Before New Season

• Analysts predict that wheat prices in Delhi will reach USD 0,43 per kg before the new season begins.
• Currently, prices hover above USD 0,39 per kg, with a significant rise anticipated in the coming weeks.
• In Madhya Pradesh, prices range from USD 0,39 to USD 0,42 per kg,
• Rajkot warehouses report prices as high as USD 0,44 per kg.
• This price increase results from growing demand, limited supply, and expectations of government intervention.

Global Factors Could Influence Wheat Prices

Global issues, such as conflicts or supply chain disruptions, may further drive wheat prices up. The government has already increased public distribution system (PDS) allocations by 3,5 million tonnes, and with elections approaching in key states, more market fluctuations are expected. The MSP is likely to rise to USD 0,30 per kg, with a possible bonus announcement for the upcoming season.

Conclusion: Rising Prices and Delayed Sowing

As wheat prices rise across India, driven by demand and delays in planting due to weather conditions, the market faces further changes. Traders and farmers must stay alert as prices continue climbing in the coming weeks. With wheat cultivation expected to increase, both government policies and market dynamics will shape the wheat industry’s future.





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