Arrivals of newly harvested wheat crops have started in Madhya Pradesh, Maharashtra and Gujarat for the current marketing season (2023-24), traders said.
Mandi prices of the new crop, mostly of the early sown varieties, have been ruling in the range of Rs 2,400-2,600/quintal against the Minimum Support Price (MSP) of Rs 2,125/quintal for the 2023-24 marketing season which officially begins on April 1.
On an average, daily wheat arrivals have been in the range of 200-1,000 bags of one quintal each across mandis in three states. The pace of arrivals is expected to pick up by the end of the month. The harvesting in Punjab, Haryana, Rajasthan and Uttar Pradesh commences by the end of March.
“Prevailing mandi prices of wheat are set to decline in the next few weeks as arrivals pick up and the prices are expected to prevail above MSP because of lower stocks in the pipeline,” Gagan Gupta, a trader in Sehore, biggest grain mandi of Madhya Pradesh, told FE.
Meanwhile, following the government’s decision to sell 3 million tonne (MT) of wheat in the open market from Food Corporation of India (FCI) stock, the mandi prices in Chittorgarh, Rajasthan for the last year’s crop have dropped to around Rs 2,500/quintal from Rs 2,900/quintal prevailing a fortnight back.
The FCI sold 0.92 MT of wheat in the open market in the first e-auction held across 22 states last week. The next auction is slated for February 15. This price fetched by FCI for wheat sales is close to the base price of `2,350/quintal, excluding freight costs from the depots fixed for the open market sale scheme.
Analysts say that because of low inventories it would be difficult for the FCI and state government agencies to procure wheat from farmers at MSP. The corporation will begin grain procurement from April 1.
“The government will have to declare a bonus of `200/quintal above MSP to procure a substantial quantity of wheat in the current season,” Devendra Vohra, a grain analyst based in Vasi mandi Mumbai, said.
On the crop prospects, Pritam Singh, a wheat farmer from Panipat in Haryana, said that prevailing day time temperature has been slightly on the higher side, but in the next four weeks the temperature should not rise sharply as happened last year which impacted the yield.
According to agriculture ministry data, wheat has been sown in 34.3 million hectare (MH) this season which is marginally higher than previous year.
The agriculture ministry will release the first advance estimate of wheat output for the 2022-23 crop season (Oct-Sept) later this month.
According to the department of consumer affairs’ price monitoring cell data, the modal retail price of wheat and flour (atta) on Tuesday rose to Rs 30/kg and Rs 35/kg, respectively, from Rs 22/kg and Rs 28/kg six months ago.
Wheat retail inflation rose by 22.2% in December.
Wheat output in the last crop year (July-June), had declined by around 3% on year to 106.8 mt because of heat waves during the flowering stage of the crop in March.
At present, the FCI has wheat stock of 15.7 MT against the buffer norm of 13.8 MT for January 1. As per the food ministry’s assessment, the wheat stocks held with FCI by April 1, 2023 would be a comfortable 9.7 MT against a buffer of 7.4 MT.