Commodity Outlook – Wheat

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:

  • According to the Ministry of Agriculture, the sowing acreage of Wheat as of January 29, 2021, was 346.36 lakh hectares (LH) up by 2.95 per cent compared to 336.43 LH during the corresponding period.
  • According to the Directorate General of Commercial Intelligence and Statistics (DGCIS), India’s overall export of Wheat from April to December 2020 was 9.76 lakh metric tonnes (LMT) valued at ₹ 1,869.93 crores.
  • As per the Food and Agriculture Organization of the United Nations, India stood at second position in the world to Mainland China where the production for 2019 was 103.59 million metric tonnes (MMT) which was up by 3.90 per cent compared to the previous year of 99.70 MMT.
  • According to the Department of Food & Public Distribution, the government had sold 4.70 LMT of Wheat in open market sale scheme (OMSS) through E Auctions in February 2021 and till now no rakes have been sold or any by any state Government.
  • In order to boost Wheat exports, the Food Corporation of India (FCI) has made a few changes in its procurement policy where the moisture content has been decreased from 14 to 12 per cent, foreign matter content has been decreased from 0.75 to 0.50 per cent and damaged Wheat content has been decreased from 4 to 2 per cent.
  • Government has fixed the 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.
  • The Haryana state government will start the procurement of Wheat from April 1, 2021, and If the transporter/s do not lift the crop from the market within 48 hours, then a fine will be imposed on them.
  • According to a statement from the Union Ministry of Consumer Affairs, Food and Public Distribution, the procurement for Rabi Marketing Season (RMS) 2021-22 in Punjab, originally scheduled between April 1 and May 25, 2021, is now scheduled to last between April 10 and May 31, 2021.
  • Uttar Pradesh state government will purchase Wheat directly from farmers from April 1 to June 15, 2021, under the Minimum Support Price Scheme.

Monsoon Update

For the country as a whole, cumulative rainfall during this year’s pre-monsoon season till March 17, 2021, is below the Long Period Average (LPA) by 47 per cent. Details of the rainfall distribution over the four broad geographical regions of India are given below:

Market commentary: Price outlook

  • Wheat prices are likely to trade steady to slightly firm in the immediate/short term but if there is major damage to standing crops that are ready to be harvested, because of an unfortunate weather condition then the prices may rise from their current level.
  • The Government had increased the Minimum Support Price (MSP) of Wheat by 2.60 per cent to ₹ 1,975 per quintal for marketing season 2021-22 compared to ₹ 1,925 in 2020-21.
  • According to various media reports of rains and hailstorms in parts of Wheat growing regions of Haryana, Punjab, Madhya Pradesh and rains in some parts of Rajasthan could affect the quality of the standing crops that are ready to be harvested. Due to these rains, it can increase the crops’ moisture content, which would lead to its rejection during the government’s procurement at MSP.

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