New crop arrivals see wheat prices fall in Madhya Pradesh

Owing to arrival of the new wheat crop in western states, prices of the commodity have started falling. In Madhya Pradesh, set to be the largest wheat producer in a year, prices have fallen to below the minimum support price (MSP). Farmers in the state are selling wheat at Rs 1,350 a quintal, against the MSP of Rs 1,500 a quintal.

The Madhya Pradesh government had announced a bonus of Rs 150 over and above the MSP. Last year, the MSP for wheat was Rs 1,285 a quintal. This year, the Ministry of Agriculture raised this by Rs 65.

R K Garg, president of the Confederation of Roller Flour Millers' of Northern Zone, said by and large, wheat harvest in the 2012-13 rabi season would be delayed across all states, owing to cool weather conditions in February. As early varieties of wheat have high moisture content, farmers get a discount on these. Garg said in Madhya Pradesh, the procurement of wheat would start on March 15. Currently, private traders are buying the crop at cheaper prices. As farmers received spot payments from private buyers, they resorted to early harvests, Garg added.

Wheat arrivals have started in the state's Malwa belt.

In Alwar, Rajasthan, arrivals have started in small quantities, with prices of Rs 1,400-1,500 a quintal. Before the arrivals, prices stood at Rs 1,580-1,590 a quintal. Ravi Golyan, vice-president of the Roller Flour Millers Association of Rajasthan, said the announcement of a bonus of Rs 150 a quintal on wheat in the state budget would raise procurement in the state, as farmers would have no incentive tp sell the commodity to neighbouring states. Procurement in Rajasthan would start on April 13.

Golyan said the price of wheat sold through the open market sales scheme in Rajasthan was Rs 1,552 a quintal. Therefore, the bonus wouldn't restrain private traders from buying wheat in the open market, as they would be spending the same amount.

In Gujarat, early crop arrivals have hit prevailing prices. The commodity is available at Rs 1,485 a quintal. After the new arrivals, prices had fallen Rs 150-200 a quintal, said Ramesh Saraf, president of the Roller Flour Millers Association of Gujarat. As drought in a few areas in the state might hit the crop, prices were likely to remain higher than the MSP of Rs 1,350, if the state government didn't offer a bonus, he added.