Wheat prices at key mandi all over the country are pricing around 14%-19% above the minimum support price (MSP) of Rs.2,015 a quintal for the current rabi season (2022-23), as traders are holding on to stocks in expectation of a further rise in prices in the build-up to the festive season.
Traders’ action has dulled the result of a ban on wheat exports, imposed on May 13 to keep domestic supplies steady, amid a drop in production. according to the wholesale price inflation data released on Tuesday, price pressure in wheat raised to 13.61% in July from 10.34% in the last month.
Wheat prices have raised Rs.2,400 a quintal at Sehore, one of the biggest mandis in Madhya Pradesh, while those are priced around Rs.2,300 a quintal in Chittorgarh mandi, Rajasthan. Arrivals, meanwhile, have been quite inactive for the last few weeks. In Delhi, flour millers are buying wheat at around Rs 2,350-2,400 a quintal.
The increase in prices is despite the government imposing restrictions on wheat exports in the middle of May and the recently imposed export restrictions on all types of flour made from wheat, including semolina and refined flour. “Most of the traders had purchased wheat by paying around Rs. 200-250 per quintal as a premium over MSP from farmers during the purchase season in April in expectation of an exports surge and they have already incurred the cost of storage and interest on the bank loan availed,” Mukesh Khatod, a trader from Chittorgarh, Rajasthan, said
According to agriculture ministry data, wheat output in the 2021-22 crop year (July-June) decreased by around 3% on year to 106 million tonnes (mt) from 109 mt, the trade estimate suggests wheat out of around 98-99 mt. In the current fiscal, India has exported around 3.5 mt of wheat. India shipped a record 7 mt of wheat worth $2 billion in FY22, against just 2.1 mt worth $0.55 billion in FY21. Currently, exports are being undertaken to cater to the genuine need for food security through government-to-government (G2G) routes.