Wheat prices in the key mandis in the key producing states – Madhya Pradesh, Haryana, Punjab and Rajasthan are ruling 21% – 26% above the minimum support price (MSP) of Rs 2015/quintal for the current season (2022-23) as traders and farmers are still holding on to stocks in anticipation of a further rise prices.
Wheat prices have touched Rs 2,550/quintal at Sehore, one of the biggest mandis in Madhya Pradesh, while those are ruling around Rs 2,500/quintal in Chittorgarh mandi, Rajasthan. Arrivals, meanwhile, have been quite sluggish for the last few weeks in mandis across states.
In Delhi, flour millers are buying wheat at around Rs 2,800-2850/quintal.
“Wheat prices are expected to rise by 5% – 7% from the current level next,” Gagan Gupta, a trader in Sehore, told FE. He said that those holding onto the grain stocks will be releasing the same by the end of December.
The wheat crop for 2023-24 marketing season, for which sowing is currently being undertaken, will start arriving in the mandis by the end of March, 2023.
The food secretary Sanjeev Chopra last week had ruled out imposing a stocking holding limit for wheat to curb spikes in the retail prices as the government is closing watching the domestic price movement.
“There has been a supply crunch of wheat for the processors currently,” Anjani Agarwal, past-president, Rollers Flour Millers Federation of India, said. He said that the government must release some quantity of wheat under the open market sale scheme (OMSS) from its stock to improve supplies.
The Food Corporation of India’s wheat stock had declined to 21 million tonne (MT) on November 1, a six-year low, against the buffer requirement of 13.8 MT for the beginning of the next year. In the middle of this month, FCI had a wheat stock of 20 MT.
Sources said that FCI may upload around 2 MT of wheat in the open market soon while the corporation had sold 7 MT in 2021-22 under OMSS. As per an assessment, the wheat stocks held with FCI on April 1, 2023 would be around 11.3 MT against a buffer of 7.5 MT.
According to the department of consumer affairs’ price monitoring cell data, the modal retail price of wheat and flour (atta) on Wednesday rose to Rs 28/kg and Rs 35/kg, respectively, from Rs 23/kg and Rs 28/kg three months ago.
Wheat retail inflation rose by 17.6% in October 2022 on year.
Wheat output in the 2021-22 crop year (July-June), as per the agriculture ministry, has declined by around 3% on year to 106.8 MT because of heat waves during the flowering stage of the crop in March. Wheat procurement by the FCI dropped by more than 56.6% to 18.7 MT against 43.3 MT purchased from the farmers in the previous year.
Meanwhile, the rabi crops sowing are going on till last week under wheat, this season touched 15.2 million hectare till last week, up 10.5% on year. The government has announced MSP for wheat of Rs 2125/quintal for 2023-24 marketing season.
In May, 2022, India banned wheat exports for ensuring domestic supplies and only shipment for meeting food security needs of developing countries are being cleared on a case-by-case basis. In current fiscal, India has exported 4.5 MT wheat so far against 7 MT shipped in 2021-22.