The Hindu Business Line : Wheat prices may gain on cues from other grains

Chennai, July 2 Wheat prices, which have been ruling steady around Rs 11,000 a tonne since April 1, could increase in the coming days as prices of other grains such as rice, barley, maize and bajra are shooting up

The prices of wheat have been kept on leash in view of a record production of over 78 million tonnes. Carryover stocks from last year have also helped in holding the price line.

Unlikely to be left out

“Wheat prices could tend to go up since prices of other grains have increased sharply in the last couple of months. In such circumstances, wheat is unlikely to be left out,” said industry sources.

Compared with last year, prices of bajra are ruling around Rs 750 a quintal, higher by Rs 100. Jowar prices are ruling around Rs 950 a quintal, also up Rs 100 from last year. Maize prices in the market in growing areas are ruling over Rs 700, while in areas where user industries are situated they are ruling over Rs 1,000. The prices are also up by similar margin as bajra and jowar.

Raging rice

Rice, on the other hand, is ruling at over Rs 2,000 a quintal compared with Rs 1,500 last year. Barley prices are currently ruling at Rs 1,185 a quintal, up over Rs 300 since last year.

Wheat prices, compared with the year-ago period, are up Rs 50.

“The other reason why wheat prices could tend to go higher will be higher freight costs as rates for petroleum products have increased. Actually, wheat prices have not increased as much as other grains,” the sources said.

According to the sources, when the prices of maize and other products that are used as cattle feed increase, there could be a tendency to look to wheat for the purpose.

Scarcity

“In fact, grains such as maize are not available in some States such as Karnataka,” the sources said.

Maize prices have increased sharply in the last few weeks as global prices have increased on damage to crops due to floods in the US Mid-west. Though a record production of over 18 million tonnes has been reported in maize, the user industries such as starch makers and poultry sector are facing short supply. This is in view of over 24 lakh tonnes of maize being exported so far.

“We should remember that inferior quality wheat, particularly red wheat that was imported during 2006 and 2007 when we faced supply problems is available. It can be used as feed,” the sources said.

In fact, prices of such wheat have increased by Rs 50 of late.

On the other hand, flour mills, currently face little problem in sourcing wheat for their needs. On Wednesday, wheat (dara) was quoted at Rs 1,050-1,115 in New Delhi market against Rs 1,050 during the same time last year.

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