Wheat prices going strong in Madhya Pradesh, courtesy Ukraine, loss of yield in north India

Private traders are offering much higher prices than government MSP of Rs 2,015 per quintal

By Shagun
Published: Friday 13 May 2022
Workers in Dabra Mandi, Gwalior district. Photo: Shagun / CSE

Wheat farmers in Madhya Pradesh continue to claim higher prices on their produce, even a month into the procurement season, amid concerns of global wheat shortage due to the ongoing Russian invasion of Ukraine.

Farmers in the state are getting anywhere between Rs 2,200 and Rs 2,400 per quintal from private traders and the prices are expected to rise further in the coming weeks. Some varieties of wheat are even selling for Rs 2,500 per quintal.

The prices are much higher than the government’s minimum support price (MSP) of Rs 2,015 per quintal.

The procurement season usually starts by the second week of April and most of the purchase is over by this time (mid-May). But this year, the procurement is still going strong as farmers are bringing their produce in instalments, in the hope of a gradual increase in prices.

“According to current trends, the prices are increasing every week, sometimes even within two or three days; by Rs 50-60 per quintal. Last week, the prices were around Rs 2,290 and today, farmers are getting up to Rs 2,350 per quintal,” Jitender Gupta, a trader at Dabra mandi in Gwalior, said.

The mandi or wholesale market sees the footfall of farmers from at least three nearby districts and also some adjoining areas of Uttar Pradesh.

Farmers here said procurement was almost over this time last year. But farmers are keeping a close watch this year, given the high wheat prices in the backdrop of the Russia-Ukraine crisis and are waiting for the right time to sell their harvest.

Most farmers Down To Earth spoke to at two mandis in Gwalior district said they had stocked at least half to one-fourth of their wheat harvest in anticipation of a continuous increase in prices.

For example, Gabbar Singh Jaat, a farmer from Urwa village in Gwalior, came to the Dabra mandi for the first time May 12 to sell just two-fifths of his crop.

“Last year, I had sold my entire crop to the government by this time. But this year, I have been waiting for a good price,” he said.

Jaat brought 80 quintals of his total harvest of 230 quintals of the high yielding ‘Raj 4120’ variety to Dabra mandi May 12 and got Rs 2,345 per quintal. The open auction for his crop started at Rs 2,280 and was finally sold at Rs 2,345 per quintal.

“Around 10 days ago, the price was Rs 2,250 per quintal and I knew it would increase. I will sell the remaining 150 quintals in the coming days,” he said. The wheat variety is also exported to other countries like Bangladesh, Sri Lanka and Oman.

Madhya Pradesh is one of the biggest exporters of wheat in India. Demand for wheat varieties like Sharbati and Kathia (durum), which are grown exclusively in the state, has risen in the international market after the ongoing crisis.

Prices in Madhya Pradesh are also high due to the loss of yield in the wheat crop of Punjab, Haryana and Uttar Pradesh. Birendra Pal, a farmer at Murar mandi in Gwalior, had sold just 25 quintals of his 200 quintal harvest till May 9 at Rs 2,280 per quintal.

Farmers and traders, both said the private procurement will continue for another month. “There is still a lot of crop which is yet to come to the market. The procurement will go strong and the prices will increase further,” Ashish Patel, a wheat trader at Murar mandi, said.

Government procurement, like in Punjab and Haryana, has fallen sharply since the MSP is much lower than the price offered by private traders. Officials at Dabra mandi said all of the 11 lakh tonnes of wheat sold at the mandi till May 12 had been procured by private traders.

Government agencies had procured 3.4 million tonnes of wheat in Madhya Pradesh under MSP operations, as on April 30, 2022. This was much less than the 12.8 million tonnes procured in the 2021-22 marketing season.

Subscribe to Daily Newsletter :

Comments are moderated and will be published only after the site moderator’s approval. Please use a genuine email ID and provide your name. Selected comments may also be used in the ‘Letters’ section of the Down To Earth print edition.