India’s wheat production expected to fall, wholesale prices to increase

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Posttime: 2023-04-14 Author: Shandong CYNDA (Group) Co., Ltd.

The ups and downs of the weather have the biggest impact on agriculture. This year, rising temperatures in February, unseasonal rain and hailstorm in March and strong winds came as a thunderclap on the hopes of wheat farmers.

After this, the emergence of strong sunlight and the feeling of coolness with a fall in temperature gave hope to the expectations of the farmers. The change in the estimated wheat production figures of the experts is creating a situation of confusion. Due to this, there is an increased possibility of low production of wheat this year and an increase in prices.

Wheat Production Estimate 2022-23

In this year 2022-23, wheat has been sown in more than 343 lakh hectare area in the country and according to the second advance production estimate, production is expected to be 111.2 million tonnes. But according to experts and reports, due to rains accompanied by strong winds, wheat grains have broken or turned black in some places. There are even reports of grain shrinkage in places. The Center had also said that 8-10 percent of the wheat crop is expected to be damaged due to unseasonal rains and hailstorms in major wheat-producing states. But this may be offset by the potential for better yields in late-sown areas.

High Moisture, low rate

The arrival of new wheat in Madhya Pradesh started in March itself. But the amount of moisture in the crop coming into the market is high. Because of this traders and big companies are refraining from buying. Even if traders are buying wheat from farmers, they are giving less price than MSP. Union Food Secretary Shri Sanjeev Chopra said that the quality standards for procurement of wheat have been relaxed in Madhya Pradesh and the same will be considered soon in Punjab and Haryana.

Food Corporation of India and state agencies have started procurement in many states. In Madhya Pradesh, hailstorms and rain at different times in March badly affected crops in most parts of the state. In more than 25 districts of the state, more than 70,000 hectares of the area came under the influence of rain and hail, due to which wheat, gram, and mustard crops were badly damaged.

Most experts are of the view that if the weather remains clear and there is no rain in the country, the production of wheat can remain close to 105 million tonnes. But if the weather is bad, the production can go below 100 million tonnes. According to the second advance estimate of the government, 112.2 million tonnes of wheat can be produced this year.

In March last year, wheat production fell due to a record rise in temperature and a heat wave. According to government estimates, 10.77 crore tonnes of wheat was produced then. But market sources say that the production had dropped to 97 million tonnes only.

Government procurement was also tight last year as farmers preferred to sell wheat to private companies and traders at a higher rate due to lower production and higher prices than the minimum support price (MSP). Last year, only 1.88 crore tonnes of wheat was sold at government centers, which was 56.58 percent less as compared to 4.33 crore tonnes of wheat in 2021-22. The government’s target is to buy 3.41 crore tonnes of wheat this year.

Price variation in market

Wheat prices had gone up to Rs 3,200 per quintal in mid-January before the government announced the sale of wheat in the open market. But after the decision of the open sale of 30 lakh tonnes of wheat in the last week of January, the prices started falling.

In February, the government decided to sell another 2 million tonnes of wheat and reduced its price to Rs 2,125 per quintal. Till March 15, the government has sold 33.77 lakh tonnes of wheat in the open market. All these decisions are affecting the prices of wheat. Even in the international market, the current prices of wheat are about 30 percent less than last year.

The war between Ukraine and Russia resulted in supply disruptions, which pushed international wheat prices above $450 a tonne in May last year to around $280 a tonne now. As a result, the price of wheat has remained below the MSP i.e. Rs 1,800 to Rs 2,000 per quintal in many states, the MSP is Rs 2,125 per quintal. If the weather worsens further, both production and quality of wheat will decrease and prices may increase. (from agropages)