Wheat, Sugar prices plunge 10-13% despite Holi demand

Prices of wheat, wheat products and sugar fell 10-13% in the last month despite a spike in demand during Holi, according to official data. However, the prices were higher compared to the same period last year.

The prices of wheat have slumped from record high of about ?3,200 per quintal in mid-January to about ?2,100-Rs 2,200 a quintal after the government started selling the cereal from its own stock to tame the prices.

The Food Corporation of India (FCI) has sold around 0.54 million tonnes of wheat out of the allocated 1.15 million tonnes to be sold through the Open Market Sale Scheme (OMSS) to traders, states, and other bidders.

However, the prices of wheat are higher than last year during the same time. A kilogram of wheat cost ?30.31 on March 6 against ?25.67 on the same day last year, according to official data.

“The prices of wheat have been on the higher side this year due to fall in production and government’s procurement. The unavailability of good quality wheat was also another factor responsible for elevated prices,” said wheat trader Mohit Upadhyay, managing partner, HMV Agro.

Wheat products such as maida and sooji, which are also consumed in high quantities for making sweets around Holi, are also around 13% less than that in January. While the retail price of sooji is around ?33 per kg, maida prices are around ?34, said traders.

The retail prices of sugar are hovering around ?41.61, marginally (0.20%) less than last month despite a slight blip in production. However, the government’s decision to announce the second tranche for exports only after the domestic output reaches the estimated 33.6 million tonnes has kept the prices from soaring.Despite coming down slightly in the last month, the sugar prices are marginally (0.92%) higher than last year. “There is not much concern about the prices and availability of sugar in the domestic market despite a slight fall in production,” said Subodh Kumar Singh, additional secretary at the food ministry, said on Monday.

However, milk prices, another commodity in much demand during festivals, have remained elevated with a 3.81% jump in cost year-on-year. Organised players such as Amul and Mother Dairy have increased the cost several times last year attributing it to the high cost of feed and fodder. Milk inflation in January was at 8.79%, according to government data.

Sanjeev Kumar Balyan, minister of state of fisheries, animal husbandry and dairying, said in Rajya Sabha that dairy companies pass on 75 percent of the retail price to farmers. There is a need to balance between farmers and consumers, he emphasised.