| K G Jhalani, a Jaipur-based trader said wheat arrivals in mandis were thin as stocks with the Food Corporation of India (FCI) as well as private traders are low. "Prices in Jaipur are already at Rs 935 a quintal from Rs 910 a quintal last week. And this rally will continue unless the government intervenes," he said. |
| A similar spurt was reported in Indore, where wheat prices have shot up by over Rs 35-40 in just two weeks. An Indore-based trader said wheat prices have firmed up to Rs 930 per quintal and are likely to cross the Rs 950 mark as trickling arrivals are coming to a standstill. |
| Jhalani said reports that wheat harvest from the Malwa and Indore region may be delayed are also keeping prices under pressure. Wheat is sown in November and harvested from March onwards. Wheat arrivals begin early in Gujarat and Madhya Pradesh as the crop is harvested in March. In other parts of the country, wheat arrivals begin only in April. |
| Wheat crop in Madhya Pradesh and Gujarat may be delayed due to low rainfall and drought in parts of central India. Jhalani said new transport norms announced the government are also contributing to the price rise. The government has announced a cap of 9,000 kg on the weight of the cargo trucks are allowed to carry. |
| "Earlier trucks carried around 20,000 kg per trip. Since the weight they are allowed to carry had been capped, freight costs have increased substantially," Jhalani said. He said in New Delhi, traders have to pay a premium of Rs 15-20 per quintal on wheat arriving from Rajasthan, Uttar Pradesh and Haryana due to higher freight costs. |
| A Delhi-based trader, however, attributed the increase in wheat prices primarily to low wheat stocks in the country. He said there are no wheat stocks with private players and even the government stocks are too expensive. "So far there had been no government intervention, and it seems even the FCI does not have adequate stocks." |
| A senior FCI official, however, denied reports of any shortfall in wheat. He said open sale by the nodal food grain procurement agency was already underway and there was no shortage of wheat anywhere in the country. |
| The official said FCI has sold 337,000 tonne of wheat in April-December period in the open market and had adequate stocks to meet the country's requirement till the next procurement season begins (which begins in mid-March). |
| It may be recalled, the FCI had earlier ruled out the need for wheat imports, saying the wheat stocks in the country were comfortable. The official said that the country's wheat stocks stood at 6.61 million tonne as on December 26. On Tuesday, Union agriculture minister Sharad Pawar assured that there was no shortage of wheat stocks in the country, he also denied any issues on the price front. |
| K N Rahman, an analyst with IL&FS Investsmart Commodity Brokers said the shortage in some mandis did not seem genuine and traders with vested interests were only lobbying for imports for better premiums. He said spot prices were following a hammer pattern. |
| "As prices rise, stockists release stocks in the market to book profits. High arrivals in the market again pull down the prices. This indicates that there is no shortage of wheat stocks with private players," he said. Rahaman said stockists have to liquidate old inventories before the new crop arrivals begin from April, which will ensure steady arrivals and steady prices. |
| Besides, expectations of a good wheat harvest from April are also lending a bearish outlook to wheat prices, he said. According to government estimates, the area under wheat cultivation so far, is higher at 27.2 million hectares as compared to 24 million hectares in the year-ago period. |
| "If the weather remains conducive for the wheat crop, prices will not increase," Rahaman said. |
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