Moneycontrol

Budget 2023Budget 2023
Register Now : Nifty Banker 3.0 | India's First Retail Index Traders Online Conference.
you are here: HomeNewsOpinion

Wheat prices must fall for procurement to succeed

The wheat prices have been ruling high since the harvesting of last year’s crop in April-May 2022 and now they are at an all-time high

January 25, 2023 / 03:26 PM IST
The top priority for the government would be to procure enough wheat to meet its requirement of about 240 lakh tonnes. (Representative Image)

The top priority for the government would be to procure enough wheat to meet its requirement of about 240 lakh tonnes. (Representative Image)

The Secretaries to Union government working from Krishi Bhawan would be worried about the turn weather will take over the next two months. The government needs at least about 240 lakh tonnes of wheat for meeting its requirement for the Public Distribution System (PDS). Therefore, at least this much wheat must be procured in the Rabi Marketing Season beginning from April 1, 2023. It may not be a given this year.

The wheat prices have been ruling high since the harvesting of last year’s crop in April-May 2022 and now they are at an all-time high. Even in wheat-growing regions of northern states, the market price is in the range of Rs 2,800-3,000 per quintal. As per Agmarknet, the wheat price in Bengaluru on January 23, 2023 was Rs 3,800 per quintal. Wheat flour (atta) is retailing at Rs 38-40 per kg, and except for the rich, most households would be feeling the pinch as inflation in rice is also in excess of 10 percent.

Price Signal

It seems that even at the time of sowing Rabi crop, the farmers were not convinced that at the time of harvest, the prices will rule much higher than the minimum support price (MSP) which is Rs 2,125 per quintal for the Rabi Marketing Season 2023-24. As a result, the sown area under wheat is only marginally higher (0.4 percent) than last year. Wheat has been sown on 34.1 million hectares against last year’s 33.98 million hectares.