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:

  • As per the Ministry of Agriculture third advance estimate released on May 25, 2021, Wheat production for FY 2020-21 was 108.75 million metric tonne (MMT) compared to FY 2019-20 which was 107.86 MMT, up by 0.83 percent
  • Government has fixed Wheat procurement target at 433.50 lakh metric tonnes (LMT) for 2021-22 which is up by 11.17 percent compared to 389.930 LMT in 2020-21
  • As on July 4, 2021 total Wheat procurement stood at 433.32 LMT for Rabi Marketing Season (RMS) 2021-22 from thirteen states and union territories, wherein the Food corporation of India (FCI) had procured 37.69 LMT and State Agencies procured 395.63 LMT
  • About 49.16 lakh farmers have already been benefitted with MSP value of ₹ 85,581.02 crores from the ongoing RMS procurement operations
  • According to FCI, there were about 19,036 Wheat procurement centres during the ongoing 2021-22 Rabi marketing season
  • According to Directorate General of Commercial Intelligence and Statistics (DGCIS) India’s overall export of Wheat in 2020-21 was 20.88 LMT valued at ₹ 4,037.60 crores
  • The Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) which was announced in 2020, is being re-implemented given the worsening situation due to the sever impact of Covid-19. Government has extended its time period till November 2021 to provide 5 kg additional food grains for free to PDS beneficiaries under the National Food Security Act, 2013 (NFSA)

Monsoon Update

For the country as a whole, cumulative rainfall during this year’s monsoon season till August 4, 2021 is below Long Period Average (LPA) by 2 percent. Details of the rainfall distribution over the four broad geographical regions of India are given below:

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 have had a slight upward movement and are likely to trade rangebound with firm bias in the immediate/short term due to the imposition of the PMGKAY scheme once again
  • Overall prices of Wheat have been trading below MSP

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