Millers see bumper wheat crop in FY24, but prices to stay around MSP

Wheat prices will remain around the minimum support price of Rs 2,125 per quintal or slightly more though India’s production in the 2023-24 marketing season, which will start in April, is expected to be a bumper one at 108-110 million tonnes, up 12-14 per cent from their FY23 estimate, according to flour millers. This is because pipeline stocks are empty.

“Record production, along with cooling prices, will enable the government to procure the targeted 34 million tonnes,” S Pramod Kumar, president of the Roller Flour Millers’ Federation of India, told reporters.

The Centre, in its second advance estimate, released in February, expected wheat production in 2023-24 to be at an all-time high of 112.18 million tonnes, up 4.12 per cent from last year on the back of a sharp increase in acreage.

In 2022-23, the Centre first estimated wheat production at 111.32 million tonnes, which was scaled down to 107.74 million tonnes owing to bad weather.

“Last year prices fluctuated almost 50 per cent while usually the price swing is in the range of 10-12 per cent due to low output,” Kumar said.

He said contrary to the government’s production estimate for FY23, his organisation’s projection was that the crop size was 95-97 million tonnes. “The situation of sharp escalation in prices as seen in December and January and virtual empty pipelines would not have happened if we had wheat in accordance with the government’s estimates,” Kumar said.

Navneet Chitlangia, senior vice-president, said the impact of a drop in wheat and atta prices on the headline inflation numbers will be felt soon.  “It takes a month for ex-mill flour rates to be reflected in consumer prices,” Chitlangia said.

“The rate has come down to Rs 23-24 per kg in the wholesale market in states where from the central pool it has been offloaded in accordance with demand, whereas prices are Rs 24-25 in states where offloading is going on. Had it not been for the timely intervention of the government (through open market sales), prices would have reached Rs 40-45,” he said. Flour millers said owing to measures of the government, wheat and wheat flour (atta) prices had fallen by Rs 6-8 per kg in the wholesale as well as retail markets in the past two months.