New wheat crop trickles in mandis; prices above MSP, say traders

The new wheat crop for the 2023-24 marketing season has started arriving at a few mandis in Madhya Pradesh and Gujarat, according to trade and market sources.

And, according to initial information, the crop for now seems to be in good condition but the price quoted is Rs 2,500-3,000 per quintal, which is higher than the minimum support price of Rs 2,125 per quintal for the 2023-24 season, which starts in April.

Though prices will fall once arrivals begin in full flow in the next two months, traders said the downside could be limited because pipeline stocks with flour millers and others were weak. This, according to some traders, could make the Centre’s target of buying wheat from farmers in the next season to replenish its granaries difficult unless it tops the MSP with a bonus.

Traders said on Monday around 500 bags of new wheat arrived in the Dewas mandi, Madhya Pradesh, and it was sold at Rs 2,950-3,100 per quintal, while around 100 bags arrived in the Jalna of Maharashtra and the sale price was Rs 2,800-3,000 per quintal. Similarly, around 1,000 bags arrived at the Rajkot mandi on Monday and were sold at Rs 2,800-3,000 per quintal.

Gujarat and Madhya Pradesh are the states where the new wheat crop arrives first. Punjab and Haryana follow and the last is usually Uttar Pradesh, where sowing takes place after the sugarcane crop is harvested. Traders said arrivals would pick up in the next 15-20 days across Madhya Pradesh and Gujarat. After that the price situation will be clear.

But a question mark remains on how the weather will behave from here onwards because any unusual upswing in temperature when winter goes could cause wheat to shrivel, as it had happened in 2022-23, when production dropped in the last phases of plant growth due to excessive terminal heat. The drop in output alongside strong demand from the international markets due to the Russia-Ukraine war forced the Centre to ban exports of wheat to control rising inflation.

Meanwhile, wheat prices in domestic markets have dropped by Rs 100-200 per quintal since the start of the open market sale scheme of the Centre. Through this it plans to sell around 3 million tonnes through various means to control rising prices. Of mt will be sold through e-auction directly for flour millers and others while the rest through designated agencies for converting it into atta for consumers.

So far, two e-auctions have been held, and in them around 920,000 tonnes of wheat has been sold.