Wheat procurement starts on dull note; might pick up pace in coming weeks

Prices started falling from second half of March because new crop started arriving from Madhya Pradesh, Rajasthan, Gujarat

Wheat procurement, which has started on a dull note, might pick up when arrivals improve in major growing areas of Punjab, Haryana and western Uttar Pradesh.

The data of the ministry of food shows that till Wednesday around 1.04 million tonnes of wheat, around 15 per cent less than in the same period last year, have been procured for the Central pool.

A big fall has been in Madhya Pradesh, where around 860,000 tonnes have been procured till Wednesday as against 1.15 million tonnes during the same period last year.

The state has targeted procuring around 6.7 million tonnes in 2018-19. 

Officials said if this trend continued it would mean wheat production in the state had been reduced owing to farmers shifting to gram cultivation this rabi season.

The government had targeted procuring around 32 million tonnes for the Central pool this year. That is around 2 million tonnes more than in 2017-18.

Wheat production in 2018-19 is projected to be around 97.11 million tonnes, marginally less than the 98.51 million tonnes in 2017-18.

Meanwhile, in the open market wheat prices have fallen below the minimum support price of Rs 1,735 a quintal. 

Prices started falling from the second half of March because the new crop started arriving from Madhya Pradesh, Rajasthan and Gujarat, along with other states. Some reports said the early crop was damaged due to late season hailstorms a month ago and small farmers started selling without waiting for procurement. 

In the past two weeks, prices in producing mandis have fallen 6-8 per cent, on average.