Wheat prices rise up to 3% on festive demand

Wheat prices have jumped 1.5% to 3% in September on festival season demand. The extension of the Prime Minister Garib Kalyan Yojana (PMGKY) announced on Wednesday is now expected to tamp down prices by increasing the total availability of wheat in the market.

“Wheat prices, which were suppressed after the ban on wheat flour exports, have increased by Rs 70-80/quintal across the county during last fortnight touching Rs 2430-2450/quintal,” said Navneet Chitalangia, a leading flour miller from Rajasthan.

Trade was expecting wheat prices to move upward substantially had the central government not extended the PMGKY. “The rate of increase in wheat prices will be slower as distribution of grains under PMGKY will increase total supplies of wheat,” said a trader, requesting not to be identified.

Slow increase in wheat prices is also expected to increase pressure on stockists to liquidate some of their stocks.

Adding up the carrying cost of wheat for the past six months, the current market prices offer no profit no loss preposition for the stockists.

“Those who do not have the holding capacity may prefer liquidating some of their stocks at this price point,” said Chitalangia.

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