The government's recent decision to halt wheat sales in the open market has led to significant shifts in the wheat market. Large companies have adjusted their strategies, increasing their sales in the wake of this move. In addition, the growing local and transactional demand for flour has intensified competition among roller flour mills for wheat procurement. As a result, wheat prices have seen a sharp increase of ₹80-90 per quintal over the past week, with expectations of an additional ₹50-60 rise in January. Impact of Government's OMSS Suspension: The government’s suspension of wheat sales under the Open Market Sale Scheme (OMSS) was anticipated to impact market prices, and this has now become evident. Our earlier projections, made last week, indicated the likelihood of a price hike, which has materialized as expected. Large companies currently hold the majority of wheat stocks, and due to a slowdown in market activity between May and December 10, wheat supplies in the mandis have decreased. Moreover, many large companies have refrained from selling their stocks, which has resulted in increased demand from roller flour mills. This shift in demand has driven up the prices of wheat. Lower-quality wheat, which was selling at ₹2,750 per quintal earlier this month, has now risen to ₹2,860 per quintal. Similarly, higher-quality wheat has experienced a price jump from ₹2,780 to ₹2,880-2,890 per quintal. Price Projections: Despite the recent price increases, wheat is still ₹250 per quintal cheaper than the same time last year. However, due to the heightened demand from roller flour mills and the government’s halted sales under the OMSS, it is expected that wheat prices will rise by ₹50-60 per quintal in January 2024. If large companies continue to hoard wheat and delay their sales, the market price could reach ₹3,000 per quintal. Consequently, the future direction of wheat prices depends largely on the actions of these large companies, as well as the potential reopening of government wheat sales in the open market. Trends in Flour and Semolina Markets: The trade of flour and semolina (suji) has significantly decreased as additional consumption has fallen. This has caused the prices of these three products wheat, flour, and semolina to converge at nearly the same price level. In the case of flour, local and transactional demand has led to a price increase of ₹20-30 per 50 kg bag. However, prices for semolina and flour have dropped by ₹20-50 per 50 kg bag during the current month. Wheat Stock and Future Outlook: At present, both government and non-government warehouses hold substantial stocks of wheat. The favorable weather conditions for wheat cultivation in the upcoming season are expected to yield a production of approximately 1,170 lakh metric tons. Therefore, the government will face the challenge of selling its existing stock before the new crop arrives. If this is not done in time, additional storage facilities will need to be arranged to accommodate the surplus wheat.