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Sowing period: October
Harvesting period: April to May
Crop season: Rabi

Key growing locations: 

1. Madhya Pradesh – Ujjain, Ratlam, Dhar, Sehore, Indore
2. Rajasthan – Kota, Baran, Chittorgarh, Bundi, Jhalawar
3. Uttar Pradesh – Kanpur, Varanasi, Agra, Bahraich, Hardoi
4. Maharashtra – Mumbai, Vashim, Dhule, Akola, Nandurbar
5. Gujarat – Rajkot, Sabarkantha, Dahod, Junagarh, Ahmedabad

Production trend and Stock position:

• As per the Ministry of Agriculture second advance estimate released on February 24, 2021, Wheat production for FY 2020-21 was 109.24 million metric tonnes (MMT) compared to FY 2019-20 which was 107.86 MMT, up by 1.28 per cent
• The government has fixed Wheat procurement target at 427.363 LMT for 2021-22 which is up by 9.60 per cent compared to 389.930 LMT in 2020-21
• As on May 29, 2021 total Wheat procurement stood at 405.47 LMT for Rabi Marketing Season (RMS) 2021-22 from twelve states and union territories, wherein the Food Corporation of India (FCI) had procured 33.93 LMT and State Agencies procured 371.54 LMT
• Under the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY), 5 kg food grains per person would be distributed for free for two months (May to June 2021)
• FCI has supplied 48 LMT of food grains to States and Union Territories for free distribution under PMGKAY and during this ongoing pandemic period and since March 25, 2020, FCI has issued a total 1,062 LMT of food grains under various government schemes
• Punjab has surpassed all previous records in Wheat procurement for the RMS 2021-22, FCI records show that this was the highest wheat procurement in Punjab’s history at 132.10 LMT as the number was under 100 LMT till 2009-10
• According to Directorate General of Commercial Intelligence and Statistics (DGCIS) India’s overall export of Wheat in 2020-21 (April to February) was 17.06 LMT valued at ₹ 3,282.77 crores

Monsoon Update

For the country as a whole, cumulative rainfall during this year’s pre-monsoon season till May 20, 2021 is normal Long Period Average (LPA) by 0 percent. Details of the rainfall distribution over the four broad geographical regions of India are given below:

Source: India Meteorological Department (IMD)

Chart 1: Mandi Arrivals of Wheat in top four states in India (MT)

Source: Agmarknet
Note: Mandi arrivals are from January to May 30, 2021

Chart 2: Price movement of Wheat FAQ (` per Quintal) – Kota, Rajasthan – Spot vs NCDEX Futures June 2021 along with the Kota monthly mandi arrivals in MT

Source: NCDEX
Note: Markets are currently in Backwardation where the Spot market prices are higher than the Futures market prices

Chart 3: Price movement of Wheat (` per Quintal) – Delhi – Spot market prices

Chart 4: Price movement of Wheat (` per Quintal) – Rajkot, Gujarat – Spot market prices

Source: NCDEX

Market commentary: Price outlook

• The Government had increased the Minimum Support Price (MSP) of Wheat by 2.60 percent to ₹ 1,975 per quintal for marketing season 2021-22 compared to ₹ 1,925 in 2020-21
• Wheat prices are likely to trade steady to slightly weak in the immediate / short term due to high procurement as compared to last year, strong export demand and imposition of the PMGKAY scheme once again
• According to various media reports Indian Wheat was offered at $280-285 per MT free-on-board (i.e. after loading at the port of origin) as compared to Australia $290-300 per MT, EU and US at $300-320 per MT and Russia/Ukraine at $270-280 per MT. The $280 per MT rate works out to over ₹ 2,050 per quintal, which is more than the current MSP. This price is fairly competitive particularly for supplying to countries such as Bangladesh, Nepal, Sri Lanka, UAE and other West and Southeast Asian markets and is one of the reasons for boost of Export.