Wheat prices stay firm as stockists hold on to grain

The wholesale price of wheat has for the past one month been firm at around Rs 28.50 a kilogram, 40% above the minimum support price, as stockists prefer to hold on to their stocks expecting further increase.

Meanwhile, the wheat processing industry has been going slow with purchases, expecting a decision about the release of wheat from government granaries.

According to trade sources, the current wheat price of Rs 28.50 in the Delhi market is about Rs 7 higher than a year earlier.


If the government sells the grain to the processing industry under the Open Market Sales Scheme (OMSS), which was a regular practice till last season, it is expected to pull down wheat prices substantially.

"Millers are buying small quantities of wheat as we are expecting the government to sell wheat under the OMSS scheme," said Navneet Chitlangia, senior vice president of the Roller Flour Millers' Federation of India.

The federation has been demanding release of wheat from public granaries to increase wheat availability for aata, maida and suji manufacturers. It has also given some suggestions about the operation of the tendering system for the sale of OMSS wheat to avoid speculation.

Industry sources expect the government to release 2 million tonnes of wheat in the open market. However, as these rumours have been doing rounds for many weeks, stockists have preferred to ignore them and remain bullish.

"Wheat prices have been holding firm as there is no concrete news about the OMSS scheme," said a Delhi-based trader, who requested not to be named.