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OUTLOOK-India wheat seen up on festival demand
MUMBAI Oct 16 (Reuters) - Wheat futures in India, the world's second-largest producer, rose on Tuesday and are likely to climb further this week on a surge in consumer demand during the ongoing festival season and on lower supplies in the spot market.
Indian wheat futures have risen over 6 percent since the beginning of this month, ahead of the Dussehra or Durga Puja festival later in October and Diwali or the festival of lights in November. Demand for wheat products rise during this time as families prepare special dishes and sweets for get-togethers.
"Demand for wheat products touches its peak during the festival season, and it could push prices up this week," said Prasoon Mathur, a senior analyst with Religare Commodities.
Higher buying by government agencies during the harvesting season in April to May left little wheat in the open market and pushed prices up.
The farm minister, Sharad Pawar, asked state-run agencies to offload wheat stocks in the market to cool domestic prices, but traders say it may not be enough.
The government usually buys wheat and rice for its welfare schemes through its agencies at above-market rates from farmers to protect them from price fluctuations.
At 1033 GMT, the key December contract on CBOT in the United States was trading up 0.71 percent at $8.54-1/4 per bushel.
The most-traded domestic contract, for November, on the National Commodity and Derivatives Exchange (NCDEX) was up 0.26 percent at 1,548 rupees ($29.23) per 100 kg (about $7.5 per bushel).
The benchmark contract hit a record of 1,612 rupees on Aug. 24. ($1 = 53.0275 Indian rupees) (Reporting by Deepak Sharma; Editing by Anand Basu)
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