Indian wheat futures firmed on Wednesday as supplies dropped in the physical market, while sugar dipped on the higher government quota for free sale sugar.
The April wheat contract at the National Commodities and Derivatives Exchange (NCDEX) rose 5.80 rupees to 782.80 per 100 kg. The May contract at the Multi Commodities Exchange (MCX) was up 11.40 rupees at 817.50. "Wheat stocks have disappeared from the market and that is why the prices are rising," said an Indore-based trader. "Fresh supplies from the northern states of Punjab and Haryana are not expected before a week."
"Whatever supplies are coming are being stored away by traders as they think the prices would rise in the coming days," said the trader in the central Indian state of Madhya Pradesh, which had been mainly feeding the demand. Government's buffer wheat stocks have been stretched because of a poor harvest last year.
Sugar fell further as the announcement of a higher government quota of free sale sugar for April continued to dampen sentiment. India regulates sugar distribution, allocating fixed quantities that can be sold every month.
The April sugar contract at the NCDEX fell 9 rupees to 1,932 rupees per 100 kg, while May sugar at the MCX was down 9 rupees at 2,055. "The undertone would remain weak throughout the month, with some fluctuations every three to four days," said an Ahmedabad-based trader.
Soyoil fell marginally in rangebound trading. The April soyoil contract at the NCDEX was 1.35 rupees down at 374.80 per 10 kg, while the MCX April contract fell 1.55 rupees to 374.30.
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