Wheat output, procurement may fall

The recent spell of rain in major wheat-growing states has become a concern for millers. In the markets of Madhya Pradesh and Rajasthan, wheat is being sold at a discount, owing to the poor quality of the initial crop. At the mandis in these states, where arrivals started two weeks ago, the commodity is priced at Rs 1,300-1,350 a quintal, against the minimum support price of Rs 1,450 a quintal.

Procurement by the government is scheduled to start across states on Thursday, with production expected to fall five-seven per cent. The lower crop is also making millers worried about the quality and prices. The price of average-quality wheat is expected to remain subdued, as the government has a huge stock, over and above the buffer, which can be released to keep prices under check.

Harvesting in Punjab, Haryana and Uttar Pradesh has been delayed by two weeks, owing to untimely rain; now, it is estimated to start by mid-April. “The exact crop, the impact on quality and prices can be assessed only when the crop starts arriving in mandis. But millers will certainly face challenges,” says Naresh Ghai, president of the Roller Flour Millers’ Association of Punjab. “Due to higher moisture content, shelf life of the grain will be curtailed.”

Millers in UP are gearing to face  unavailability of quality wheat. “Prices might plunge  for the grain, affected by the rain. It will also affect the supply chain. Wheat of a sub-standard quality can only be used for biscuit-making; the better quality is used for making bread and general consumption. If consumers settle for lower-quality wheat, it would be difficult to upgrade them to the higher standards next year,” said Adi Narayan Gupta, senior member of Roller Flour Millers’ Association of Uttar Pradesh.

The governments of Madhya Pradesh and Rajasthan haven’t announced any bonus over the minimum support price. Last year, these states had offered a bonus of Rs 150 a quintal to wheat farmers.

High-quality Saurashtra wheat is being traded at Rs 3,000-4,000 a quintal, compared with Rs 2,200-3,000 a year ago. Devendra Vora, a Mumbai-based trader and director of Friendship Traders, estimated a consistent increase in the prices of premium-quality wheat, owing to low availability.

The Directorate of Wheat Research, Karnal, has estimated a crop loss of five-seven per cent this year compared to the last. As the Centre has about 22 mt of wheat stock, against the mandated buffer of 10 mt, availability of wheat is not likely to be affected.

Sources in Food Corporation of India confirmed the procurement targets would be scaled down, adding field officers were assessing the exact crop loss. Punjab has already cut its procurement target from 12.4 mt to 11 mt.