Wheat Daily Update | 14 Jan, 2025

Wheat prices in key markets have remained steady to strong due to rising festive demand. The increased demand has pushed prices upward, and market participants are closely monitoring government measures to manage supply.

To address the growing demand, the government raised its weekly wheat allocation for auctions from 1 lakh tons on January 8 to 1.5 lakh tons on January 15, marking a 50% increase. However, many market experts believe this is still insufficient. They suggest that prices may remain strong in the near future unless the government raises weekly allocations to 3–4 lakh tons.

State-Wise Allocation Increase

The government has significantly increased wheat allocations in several states:

• Andhra Pradesh: Increased by 33.3%, from 750 metric tons to 1,000 metric tons.
• Assam: Increased by 38.4%, from 6,500 metric tons to 9,000 metric tons.
• Bihar: Increased by 53.8%, from 6,500 metric tons to 10,000 metric tons.
• Delhi: Doubled (100% increase), from 14,000 metric tons to 24,000 metric tons, the highest increase among all states.
• West Bengal: Increased by 23%, from 6,500 metric tons to 8,000 metric tons.
• Odisha: Increased by 30%, from 2,000 metric tons to 2,600 metric tons.

Market Performance

Key wheat markets have seen price increases:

• Delhi: Prices rose by ₹55 per quintal to ₹3,330 per quintal.
• Uttar Pradesh: Increased by ₹20 per quintal to ₹3,160 per quintal.
• Madhya Pradesh: Increased by ₹10 per quintal to ₹3,140 per quintal.
• Gujarat and Rajasthan: Both saw a ₹20 per quintal increase to ₹3,160 per quintal.
• Bihar and Kolkata: Prices remained stable at ₹3,120 and ₹3,290 per quintal, respectively.
• South India: Prices rose by ₹25 per quintal to ₹3,425 per quintal.

Stock and Sowing Update

As of January 1, the opening wheat stock stood at 18.4 million tons. Of this:

• 4.5 million tons are allocated for the Public Distribution System (PDS).
• 9.5 million tons are for buffer stock.
• 0.6 million tons are for the Open Market Sale Scheme (OMSS).
  
  This leaves the government with 3.8 million tons, expected to be sufficient to prevent major price fluctuations for the next 2.5 months.

Wheat sowing has reached 31.9 million hectares and is nearly complete in most major wheat-producing states, except for some areas in Uttar Pradesh and Bihar. The crop condition is favorable.

The government has set a procurement target of 30 million tons for the 2025–26 wheat season. With low physical stock levels and the likelihood of further government allocation increases, wheat prices could rise further if allocations for the January 22 auction are maintained or increased. Market participants remain cautious, awaiting updates on supply measures and government actions.