June 14, 2011

Indian wheat prices to experience loss for third week

India's wheat futures are likely to extend losses for the third consecutive weak on lack of demand in the physical market, analysts and traders said.

"There is nothing in the market to support prices and this is likely to remain under pressure in the current week. However, with the monsoon reaching north India towards the first week of July, there could be some buying in wheat," said an analyst.

According to analysts, the decline in wheat futures is mainly due to strong arrivals in the spot market and a record output in the current season.

India's wheat consumption is around 76 million tonnes while harvest in 2011 was a record 82.3 million tonnes, up from 80.8 million tonnes a year earlier.

The most active wheat for June delivery on National Commodity and Derivatives Exchange (NCDEX) was trading at INR1,171 (US$26.18) per 100 kg, up 0.19%.

According to traders, higher stock position with the government is also dampening the spirit.

Wheat stocks with the government was 31.4 million tonnes and that of rice 27.8 million tonnes as on May 1, well in excess of targets of 4.0 million and 12.2 million tonnes, respectively.

Wheat arrivals in the world's second-biggest producer of the grain begin in March and peak by mid-April, but were delayed this year.

India grows only one wheat crop in a year, with planting in October and harvesting in March-April.