Impact of prohibiting export: Wheat prices go below MSP in MP mandis

Prohibiting wheat export has begun to have an impact on its prices in the domestic market. While the wheat prices were substantially above the Minimum Support Price (MSP) until a few days ago when exports were allowed, they have gone below MSP in some parts of the country now. This fall in prices is not only harming the farmers but also worrying the traders who had bought wheat for exporting and kept it with themselves. In Punjab, which makes the largest contribution to the central pool, the wheat prices are running at a little above MSP. Meanwhile, very little wheat is now arriving in the mandis of several states, including Punjab and Madhya Pradesh (MP).

The MSP for wheat is Rs 2,015 per quintal for the Rabi Marketing Season (RMS) 2022-23. But the price of mill-grade wheat has gone below MSP at the Bina mandi in MP. Wheat is selling there for as low as Rs 1,950 per quintal. The prices of the famous Sharbati wheat of MP have also gone down. Its prices had gone up to Rs 2,400 per quintal in the Dewas mandi but have now come down to Rs 2,200 per quintal.

Yogesh Dwivedi, the CEO of Madhya Bharat Consortium of Farmers Producer Company Ltd, told Rural Voice that prohibiting export had worried the MP traders, too. They had bought wheat in large quantities. Dwivedi said that 3,000 wheat-laden trucks of MP traders were stranded at the Kandla airport. Uncertainty still prevails regarding their export while, on the other hand, traders have to bear the truck hiring charges. A two-day strike is going on at the MP mandis against the decision to prohibit exports and will end on Thursday.

The government announced on Tuesday some relaxation to its order prohibiting wheat export. The Ministry of Commerce said that wherever wheat consignments had been handed over to the Customs for examination and had been registered into their systems on or prior to May 13, such consignments would be allowed to be exported. Earlier, on May 13, the Directorate General of Foreign Trade (DGFT), Department of Commerce, had issued an order to restrict wheat exports with immediate effect.

Meanwhile, besides MP, the arrivals of wheat have dropped significantly in the mandis of Punjab, too. So, little wheat is being procured at the mandis here. Some farmers are holding wheat stocks in the hope of better prices. Private traders are buying the wheat that is arriving in the mandis here at the rates of Rs 2,025-Rs 2,050 per quintal and, depending on the quality, the maximum price is Rs 2,100 per quintal. The arrival is less at the Sriganganagar mandi, too — only about 5,500 quintals of wheat is arriving here in a day. Wheat has sold in the range of Rs 2,015-Rs 2,182 per quintal at the Sriganganagar mandi.

On the other hand, there are fears of a decline in the production of wheat in MP, too, besides Punjab and Haryana. Dwivedi said that the farmers who had sown wheat early will not suffer a loss, but there are fears that those who sowed late may see a decline of up to 10 per cent in production. Commerce Secretary BVR Subrahmanyam, however, said only recently that there was no likelihood of a major decline in wheat production.

Wheat grains shrivelled, especially in the northern states, due to an unusual rise in temperature in March and April. Farmers in most parts of the country say that their production has gone down by 15-25 per cent. However, the government has reduced its wheat production estimates by only 5.7 per cent. The earlier projection for wheat production was 11.13 crore tonnes, which has now been revised downward to 10.5 crore tonnes. Wheat production stood at 10.96 crores in 2020-21.