Wheat price hovers around MSP with arrivals set to rise

Market arrivals of the new wheat crop have begun in Central India over the past couple of weeks and prices are broadly hovering around the minimum support price (MSP) level of ₹1,840 per quintal across various markets at the start of the season.

Arrivals are set to gain pace in the days ahead in Madhya Pradesh and Rajasthan, where procurement operations will begin later this month.

At Indore’s mandis, wheat is currently being sold at ₹1,750-2,100 a quintal. Milling quality wheat is being traded at ₹1,925-90 a quintal. Demand from the millers is comparatively weaker because of the high moisture content in the cereal coming into the markets, a trader said.

Compared to last year, wheat prices are ruling marginally lower in the absence of a price difference payment scheme (Bhaawanter Yojna). Last year, the BJP Government in Madhya Pradesh had paid a bonus of ₹260 per quintal to farmers under the Bhaawanter scheme. However, the Congress government, which waived farm loans after coming to power, has revoked the scheme of the previous government this year.

Currently, wheat is primarily coming in from the Nimar and Malwa regions of Madhya Pradesh, where wheat ripens earlier. The mandis in Indore are currently witnessing an arrival of 20,000-22,000 bags of new wheat, while total arrivals across the State are about 1 lakh bags. The arrival is expected to pick up further in the coming days. With the rise in acreage this year, the crop prospects in Madhya Pradesh are better this year.

Wheat prices in Indore may gain in the coming days with temperatures rising and moisture content in the cereal declining, another trader said. The M.P. government is expected to begin procurement operations from March 25. The MSP has been increased to ₹1,840 per quintal from ₹1,735 last year.

In Rajasthan, the State government has started registering farmers for wheat procurement at MSP. The procurement process will start from April 1 in the State except Kota division, where the process will start from March 15, State Food and Civil Supplies Minister Ramesh Chandra Meena said in a statement.

Across other producing regions in North India, crop conditions have been good, said Veena Sharma, Secretary, All India Roller Flour Millers Federation “Weather is crucial for the next two weeks. We hope there are no hailstorm or rains this year,” Sharma said.

The crop condition in Haryana and Punjab is in the grain filling stages. The extended winter is seen aiding the crop in and may delay the harvest by a couple of weeks, she said.

While the Agriculture Ministry, in its 2nd Advance estimates, has forecast a wheat output of 99.12 million tonnes for the 2018-19 season, the trade expect production to be around 95 mt .

While the dry weather had impacted plantings in Gujarat and Maharashtra, the trade expects the higher area covered in Madhya Pradesh and Uttar Pradesh to help offset the decline.

Source; BL