A few weeks back, wheat prices in Delhi's markets soared to ₹3,360 a quintal. The jump came despite the Centre pumping in large quantities of wheat through the open market sale scheme (OMSS) of the Food Corporation of India. The government recently said it was keeping a close watch on wheat prices while world markets were seen to be under pressure due to an oversupply.
In 2023-24 (FY24), the government pumped in 10 million tonnes of wheat from its inventories to cool prices. However, in November last year, only around 2.5 million tonnes was allocated for open sales, of which 900,000 tonnes have already been pumped into the market and 860,000 tonnes have been lifted at auctions, so far showing only a limited impact on prices. Trade sources say that since the first tender for open sales issued in November to the last one issued a few days back, wheat prices in the open markets have risen by ₹150 a quintal in the Delhi market.
"The prices, instead of coming down, have risen," said a large trader based in Delhi. The primary reason for the rise is that the market is hungry for wheat and there are low pipeline stocks with flour millers and biscuit-makers. "There is a lot of speculative activity, too, going on in the wheat markets, keeping prices high," he said.
Talk of speculative activity has gained ground because official estimates put wheat production in the 2023-24 crop, which ended in July, at an all-time high of 113.29 million tonnes, up 2.47 per cent from the previous year. Wheat stocks in state warehouses totalled 18.41 million tonnes at the start of this month - it was 16.35 million tonnes in January last year.
The Centre fixed a reserve price for wheat under OMSS at ₹2,325 a quintal for 'fair and average quality grain' and 2,300 per quintal for 'under reduced specifications grain'. However, traders say the prices fetched at the auctions are much higher than the reserve price, reflecting unsatiated demand.
This story is from the January 29, 2025 edition of Business Standard.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber ? Sign In
This story is from the January 29, 2025 edition of Business Standard.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber? Sign In
Hotel Liable for Death in Swimming Pool
Neeraj Seth was staying at Vishal International Hotel in Jamnagar. On June 26, 2013, while swimming in the hotel's pool, he drowned.
Musk's DOGE gets access to US govt payment system
The Department of Government Efficiency (DOGE), run by President Donald Trump's billionaire adviser and Tesla CEO Elon Musk, has gained access to sensitive Treasury data including Social Security and Medicare customer payment systems, according to two people familiar with the situation.
Focus on domestic consumption amid global uncertainties
The Budget 2025-26 meets the expectations of fiscal consolidation, maintaining capital expenditure, and boosting consumption through tax cuts.
Individual credit score boost for 100 mn SHG members
A fantastic move in the FY26 Budget is the offer for almost 100 million people, mostly in rural India, to get credit scores riding on the performance of self-help groups, or SHGs.
5-Year Extension of Incorporation Deadline Brings Cheer to Startups
Move allows DPIIT-registered ones to avail tax benefits
Right price, right time: Volatility unlocks opportunity
The announcement of ₹1 trillion in tax savings in the Union Budget is certainly welcome news. However, according to Vikas Khemani, founder of Carnelian Asset Management & Advisors, the rally in consumer stocks may soon lose momentum due to unfavorable valuations and potential market disruptions. In an email interview with Samie Modak, Khemani emphasized that 2025 is a year to manage expectations carefully and to remain disciplined and committed to long-term investment strategies. Edited excerpts:
50:50 chance of a rate cut
The RBI can go for a cut. If it doesn't, it will continue with measures to infuse liquidity, signalling a new cycle
2025 Is The Year For Investors To Build Portfolio For The Future
Union Budget 2025 seems to have provided a reason for consumption growth in the months ahead. JYOTIVARDHAN JAIPURIA, founder and managing director (MD) of Valentis Advisors, told Puneet Wadhwa in an interview that the cut in personal income tax is beyond what the markets expected. The markets will go through a time correction and consolidate for a few months, he said. Edited excerpts:
More Push for Pvt Funding in Power Infra
Centre lures states with higher borrowing limit, brings back focus on privatisation of distribution companies
Tax relief, lower duty may aid auto sales
Budget announcements may boost sales of small as well as used cars