Market arrivals of the new wheat crop have picked up in Central India with the harvest gaining pace in states such as Madhya Pradesh, Gujarat and Maharashtra, resulting in a softening trend in the prices of the cereal. Wheat is currently witnessing encouraging buying support at the current level from stockists and millers such as ITC, among others.

The market arrivals in Madhya Pradesh are higher and a bit early by a fortnight, compared to last year, as there was no disruption in the crop cycle due to the winter rains and hailstorms unlike last year.

The early market arrivals have forced the MP Government to advance the commencement of procurement from March 15. However, in Gujarat, though arrivals are a bit late on account of delayed sowing, they have gained momentum in the past few days.

In Gondal, daily arrivals are pegged at about 7,000 bags (each of 50 kg), which is a tad lower than last year. Other markets, including Rajkot, Junagadh and Himmatnagar, reported modest arrivals of 5,000, 6,500 and 2,000 bags each. Prices have been hovering in the range of ₹1,625-1,800 in these markets in Gujarat.

Import duty “The offtake is medium as compared to last year, therefore, prices are also lower by about ₹125-150 per quintal. But we expect the prices to firm up in the later part of the season mainly due to the tight supply condition,” said Haribhai Panchani, a farmer in Rajkot district.

Arrivals are expected to peak after Holi, following which prices may come under pressure. However, the trade is keenly awaiting the Centre’s stance on the current duty structure on wheat imports. Trade sources said that assuming the duty is hiked, the sentiment may change and prices may stay firm as the Government has set an ambitious procurement target of 33 million tonnes this year.

“The stock in government warehouses is at its lowest. Even if the arrivals increase, there are lesser chances of a sharp decline in the prices as there will not be a huge surplus. Last year, too, we had a similar arrival pattern and nearly the same prices. This year prices will not fall sharply, but may firm up a bit,” said PC Somaiya, secretary, Gondal APMC.

Indore arrivals In Madhya Pradesh, the daily arrival in Indore was at around 15,000 bags, while in Ujjain and Dewas it stood at 10,000 and 15000 bags each. Given the State Government’s announcement that it would purchase wheat from March 15 onward, the arrival of wheat in mandis may decline as the majority of farmers will go for government’s purchase at the rate of ₹1,625 a quintal, said Heeralal, a trader in Indore.

Currently new wheat in the MP mandis is being quoted between ₹1,550-1,850 per quintal, depending on its quality. The government procurement may lend further strength to wheat prices in the coming days, said Sanjay Agrawal, a trader in Indore.

However, in the eventuality of big private companies staying away from bulk purchases, the wheat prices may decline marginally, Agarwal said.

“We depend on the high quality wheat from Madhya Pradesh and Rajasthan. If we are able to get the quality and quantity, we don't need to look at imports,” said MK Dattaraj, Managing Director, Krishna Flour Mills in Bengaluru.

On account of better quality of the wheat crop this year, prices in Madhya Pradesh’s mandis this year are comparatively higher that last year.

Wheat prices last year in Indore and other mandis of Madhya Pradesh sunk to rates as low as ₹1,425-50 a quintal because the quality was damaged by unseasonal rains and hailstorms.

India is headed for a bumper wheat crop as farmers have brought a larger area under the cereal in the major producing States of Uttar Pradesh, Madhya Pradesh and Rajasthan, among others, aided by favourable climate in these states.

The Government expects wheat output to exceed the targeted 96.5 million tonnes.

With inputs from our Indore Correspondent

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