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    HomeBusinessMandi prices of wheat fall, but still marginally above MSP

    Mandi prices of wheat fall, but still marginally above MSP

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    Traders say that only a small quantity of wheat crop is held by farmers currently, as major chunks have been purchased by traders by paying higher than MSP prices in anticipation of a surge in exports.

    Mandi prices of wheat were ruling just above the minimum support price (MSP) on Wednesday in Rajasthan, Uttar Pradesh, Gujarat and Delhi.

    Trade sources told FE that in Punjab and Haryana, arrivals of wheat in mandis have been minuscule, while markets in Madhya Pradesh had been closed for the last two days as traders have been protesting against an abrupt ban on wheat exports imposed by the government last week.

    Traders say that only a small quantity of wheat crop is held by farmers currently, as major chunks have been purchased by traders by paying higher than MSP prices in anticipation of a surge in exports.

    In Rajasthan, Delhi and Gujarat on Wednesday, mandi prices of wheat were in the range of Rs 2,050 a quintal to Rs 2,100 a quintal against MSP of Rs 2,015 a quintal. “Arrivals have dipped because of a decline in prices following the government announcing a ban on wheat export,” Mukesh Khatod, a trader from Chittorgarh, Rajasthan, said.

    On Monday, mandi prices of wheat had declined by 8% to Rs 2,150 a quintal from Rs 2,325 a quintal in Rajasthan, Gujarat and Delhi mandis because of the ban imposed by the government last Saturday.

    At Sitapur mandi in Uttar Pradesh, India’s largest producer of wheat, mandi prices were Rs 2,020 per quintal on Wednesday.
    “Wheat prices will be ruling around the MSP in the next couple of weeks,” Gagaan Gupta, a trader and commission agent at Sehore mandi in Madhya Pradesh, said. However, he said the quantity of arrivals would remain small as most of the traders and exporters have completed procurement operations of wheat by now.

    In Sehore, one of the biggest wheat markets in Madhya Pradesh, traders said that wheat-loaded trucks moving towards Mundra or Gandhidham port in Gujarat have been halted and there, over 150 trucks of traders who operate in the mandi are stuck at port. As reported earlier, around 6,000 trucks have been stuck in Kandla, as all loading of wheat into ships was stopped following the ban on exports.

    However, the government had given relaxation in allowing exports of 0.35 million tonne (mt), besides those consignment having letters of credit. Overall, India could export around 4.5 mt of wheat in the current year.

    Amid the reports of drop in wheat production to 105 mt from the earlier estimate of 111 mt for the 2021-22 crop year (July-June), government agencies have so far procured 18.09 mt of wheat from farmers, mostly in the key growing states of Punjab, Haryana, Uttar Pradesh and Madhya Pradesh, till Tuesday — a decline of more than 51% compared to the same period in the previous year.

    Arrivals of wheat in mandis across the states have dipped despite the government announcing extension of the wheat procurement date for Punjab and Haryana to May 31, while purchase operations will be allowed in Uttar Pradesh and Madhya Pradesh till June 15.

    “Overall procurement is not likely to touch 18.5 mt despite the extension of date of purchase,” an official said.

    According to an official note, more than 1.7 million farmers have benefited from the ongoing rabi purchase by government agencies with an MSP payment of Rs 36,469 crore.

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