Free import clampdown props up wheat futures

Wheat futures prices have gone up by nearly 4.5 per cent over the last 15 days.

Wheat futures have seen a rising trend, particularly after Union Agriculture Minister Sharad Pawar's statement at the Economic Editors' Conference of not allowing private traders to import wheat at zero duty beyond December.

In September, private traders were allowed to import wheat duty-free.

At the National Commodity and Derivatives Exchange (Ncdex), the prices of wheat futures for November delivery have jumped from Rs 1,091 a quintal on October 28 to Rs 1,140 on Monday.

December futures prices have moved from Rs 1,107 a quintal to Rs 1,150 during the same period. The spot prices of wheat in Delhi's Lawrence Road mandi has increased from Rs 1,105 a quintal to Rs 1,160 over the same period.

"There is a buzz that India may not be able to receive the shipments for the entire quantity of 55 lakh tonne that has been contracted for import.

Globally, there is a decline in wheat production. Australia has already declared the possibility of a decline to the tune of 62 per cent in this year's wheat output. As things stand, December wheat futures may touch the Rs 1,200 mark," said a Karvy analyst.

Ukraine has already suspended export of wheat. Of the 1.5 lakh tonne wheat contracted from Ukraine by the Projects Equipment Corporation on behalf of private traders, only 1 lakh tonne was supplied.

On the other hand, the wheat acreage in the country as on November 10 has gone up by about 68 per cent when compared with the acreage last year. About 26.27 lakh hectare has been planted with wheat till November 10, an increase of over 10 lakh hectare compared with that of the corresponding period last year.

The increase in spot wheat prices, together with a Rs 100 per quintal hike in the Minimum Support Price (MSP) of wheat, has brought more area under wheat cultivation.

The government has contracted to import 55 lakh tonne wheat for various welfare schemes after the government agencies had procured only 92 lakh tonne. Of this, about 26 lakh tonne has arrived in the country as on November 8.