Wheat Production Drop Sparks in 2024, Price Surge in These States
The Impact of Wheat Production and Prices in 2024 This year, wheat has asserted its distinctive significance and influence in both the nation and the market, whether through calls for legal assurances of MSP from the government via farmer protests or as a result of delays in wheat harvesting caused by weather conditions. An estimated shortfall of 1 million tons in wheat production is anticipated in India this year compared to the previous year. Wheat harvesting has commenced across India, with approximately 45 percent of the crop already harvested, and the expectation of completion in most states by April.
Impact of MSP on Wheat Prices:
Farmers across the country are presently reaping the benefits of favorable wheat prices, with a significant contributing factor being the increased MSP set by the government. Until the fiscal year 2023-24, the government had fixed the MSP for wheat at Rs. 2125 per quintal. However, for the fiscal year 2024-25, the central government has raised the MSP for wheat by Rs. 150 per quintal, now standing at Rs. 2275 per quintal, representing a 7.1 percent increase. Furthermore, the government has announced bonuses in addition to the hike in MSP for wheat, with an increase of Rs. 125 per quintal in Madhya Pradesh and Rajasthan. Notably, MSP prices have also been raised for six other crops.
Anticipated Surge in Wheat Arrival in Uttar Pradesh Starting April:
The government has aimed for a wheat production target of 6 million tons in Uttar Pradesh for the year 2024. However, as of the current 2024 season, wheat arrival has not been witnessed in states like Madhya Pradesh, Gujarat, and Rajasthan. It is anticipated that there will be a significant surge in arrivals at market yards from April, especially after Holi. Uttar Pradesh holds the top position in the country in terms of wheat production. In March 2023, the average maximum price of wheat in prominent districts such as Azamgarh, Gorakhpur, and Jaunpur in Uttar Pradesh ranged from Rs. 2300 to Rs. 2400 per quintal. Meanwhile, in Delhi, the price of wheat ranged from Rs. 2650 to Rs. 2700 per quintal. This year, until March 2024, there has been notable fluctuation in wheat prices, with average prices ranging from Rs. 2450 to Rs. 2550 per quintal in markets like Lucknow, Aligarh, and Gorakhpur. The central government has announced a Rs. 150 per quintal increase in the MSP for the 2024-25 season. However, there has been no announcement regarding any bonus on the MSP in Uttar Pradesh.
Rapid Surge in Wheat Prices Observed in Madhya Pradesh:
States such as Uttar Pradesh, Madhya Pradesh, Punjab, Haryana, and Rajasthan are significant contributors to wheat production in the country. In March 2023, the average maximum price of wheat production in prominent cities of Madhya Pradesh like Ujjain, Dewas, and Dhar ranged from Rs. 2400 to Rs. 2700 per quintal. This year, in March 2024, the average maximum price of wheat is ranging from Rs. 2800 to Rs. 3000 per quintal. There has been a rapid increase in the prices of local and premium wheat in Madhya Pradesh, with a notable example being the market in Rajgarh district. According to statistics, wheat prices in March have reached levels exceeding Rs. 4000 per quintal. Particularly in districts like Vidisha, Sihor, Guna, and Ashoknagar of Madhya Pradesh, there is a continuous surge in wheat prices. The government has announced a bonus of Rs. 125 on the MSP for wheat in Madhya Pradesh. As a result, wheat prices have now reached Rs. 2400 per quintal. Many farmers have retained their wheat stocks to fetch better prices, while wholesale traders are holding back arrivals to sustain the upward momentum in prices.
Government Issues Directive for Wheat Procurement: In 2024, the Ministry of Food and Consumer Affairs issued a government directive regarding wheat procurement. This year, the Ministry has lowered the target for government wheat procurement at MSP. In 2023, the government aimed to purchase 341 million tons of wheat in the country, a target that was not met. For 2024, a target of approximately 320 million tons has been set for all state governments, reducing the wheat procurement target by 21 million tons. The government had previously banned wheat exports in May 2022. Currently, a government directive has been issued to cease open market sales and sales to other government or major private traders for wheat exports.
India Wheat Production Ranking: Wheat holds significance not only in India but also globally as one of the most consumed food grains. China leads in global wheat production, with over 136.6 million metric tons produced in the 2023-24 period. India ranks second in wheat production. However, over the past two to three years, wheat prices have shown significant improvements. One contributing factor is the impact of ongoing conflicts between foreign nations, such as the Ukraine-Russia conflict, where both countries play vital roles in wheat production.