With forecast of a record harvest and sale of stocks in the open market by Food Corporation of India (FCI), the wheat prices are expected to soften further in the next few days, Sanjeev Chopra, Secretary, department of food and public distribution, has said.
Stating that after the first e-auction of wheat by FCI held earlier this month, mandi prices have fallen below Rs 2500/quintal from a high of Rs 2900/quintal, Chopra said that ‘prices will be coming down further in coming days’.
The government is aiming to bring down the mandi prices of wheat to Minimum Support Price (MSP) of Rs 2125/quintal announced for 2023-24 marketing season (April-June) in the next couple of weeks.
On the agriculture ministry’s estimate of a record wheat harvest of 112.18 million tonne (mt) for the 2022-23 crop year (July-June), Chopra said it would boost the government’s procurement drive for next the marketing season which begins on April 1.
The food ministry has called a meeting on March 1 of state ministers for setting a target for wheat procurement for 2023-24 marketing season.
While bulk buyers and traders have purchased 0.92 mt of wheat from FCI in the first e-auction held by FCI at the beginning of the month. The second e-auction for selling 1.5 mt of wheat was held on Wednesday.
Inflation in wheat prices rose by a sharp 25.05% on year in January, pushing up retail food inflation to 5.94% from 4.19% reported in the previous month.
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 22/kg and Rs 28/kg six months ago.
The government is exploring options like imposing stock holding limit for wheat and releasing additional quantities of the grain over and above the 3 mt approved last month for the open market sale from the FCI stocks to cool retail prices. Besides, the government has decided to continue with the ban on wheat exports imposed last year till the end of the 2023-24 marketing season.
Due to lower production and higher global demand, the FCI’s procurement in the 2022-23 marketing season fell by more than 56.6% to only 18.8 mt against 43.3 mt purchased from the farmers in the previous year.
As on Tuesday, the FCI has wheat stock of 13.9 mt which is above 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.
Meanwhile, wheat of early sown varieties has already started arriving in Madhya Pradesh and Gujarat.
On this year’s wheat prospects and a few weeks ahead of harvesting of crop, Chouhan had told FE that this year the state’s grain output will be at the record level. Madhya Pradesh is the second biggest producer of wheat in the country after Uttar Pradesh.
