India’s wheat manufacturing this 12 months is seen larger than the previous two years however farmers holding again their produce anticipating larger costs is affecting millers and merchants. “Although the Ministry of Agriculture has pegged wheat manufacturing at 112.01 million tonnes (mt), we anticipate it to be 105 mt. That is 5-6 mt larger than our estimates final 12 months,” mentioned a world buying and selling supply.
“Although manufacturing is reported to be larger, wheat just isn’t arriving within the markets. It is usually not accessible for procurement,” mentioned Pramod Kumar, President, Curler Flour Millers’ Federation of India (RFMFI).
Document yield in Punjab
The federation had commissioned a survey final month and mentioned wheat manufacturing is estimated to extend 3 per cent this 12 months to 105.79 mt. The US Division of Agriculture (USDA) has projected India’s wheat manufacturing at 112.5 mt on account of well timed sowing and beneficial climate. Whereas the Ministry of Agriculture pegged the manufacturing final 12 months at 110.55 mt, millers and commerce say it’s beneath 100 mt. “The crop this 12 months is sweet throughout nearly all States barring Madhya Pradesh and, to some extent, Gujarat,” mentioned the buying and selling supply.
One other dealer agreed that manufacturing this 12 months is sweet in Punjab, Haryana, Uttar Pradesh, Rajasthan and Bihar. “Punjab has by no means seen such a report yield of 5 tonnes per hectare,” mentioned the supply.
Kumar mentioned the issue is with costs ruling larger than the minimal help value of ₹2,275 a quintal this 12 months. “Farmers aren’t prepared to supply it to the federal government for procurement and are holding again,” he mentioned.
Artificially jacked up?
A supply within the milling sector mentioned wheat costs have tended to remain elevated regardless of harvest and arrivals choosing up. “Seems to be like they’re being held up artificially,” the supply mentioned.
In keeping with information from Agmarknet, an arm of the Ministry of Agriculture, the weighted common value at the moment is ₹2,350 in contrast with ₹2,164 a 12 months in the past. Arrivals on the agricultural produce advertising and marketing committee (APMC) yards have been pegged at 14.40 mt in contrast with 14.93 mt a 12 months in the past. However, information from the Central Foodgrains procurement portal confirmed that wheat procurement to date is 24.29 mt. Final 12 months, it was 26.07 mt and 18.75 mt in 2022.
Kumar mentioned 75-80 per cent of the crop in Punjab has arrived and the remaining are being held by small merchants and native brokers. “The plan is to convey them to the market late to get a greater value,” he mentioned, including that costs in Madhya Pradesh, Uttar Pradesh and Rajasthan had been larger.
The Meals Company of India has procured 12 mt from Punjab and on the most might get one other 1 mt, the RFMFI President mentioned.
MP yield decrease
“There are a few the explanation why wheat costs are excessive. The Uttar Pradesh authorities has informally banned gross sales of wheat to non-public commerce and can be not permitting its transportation. The crop can be being held again,” mentioned the milling sector supply mentioned.
The buying and selling supply mentioned in Madhya Pradesh the yield is decrease whereas there’s additionally the issue with the standard.
Kumar mentioned one downside of tackling the difficulty could be to allow imports. “That may mechanically convey down the costs,” he mentioned.
The USDA has projected imports of two mt of wheat by India this 12 months regardless of a better crop. One motive for the USDA projection might be that wheat shares had been at a 15-year low as of April 1 at 7.5 mt, which meets the obligatory requirement together with 3 mt of wheat as strategic reserves. In 2008, wheat shares on the identical date had been 5.8 mt.
In 2022 and 2023, wheat manufacturing was affected by unseasonal rains and weird warmth, respectively.