Wheat prices eased in the e-auction held by the Food Corporation of India (FCI) on Thursday, mainly due to a higher quantity offered from previous round of bidding. However, with weather playing truant prices of the rabi-grown cereal in the open market will be driven as per the crop estimate by the trade and industry.
The offered quantity was raised to 5 lakh tonnes (lt) w from the previous 4 lt due to a sudden escalation of prices in the February 19 auction. Out of the 1 lt raised this week, 63 per cent was offered to five key-producing states of Uttar Pradesh, Madhya Pradesh, Punjab, Haryana and Rajasthan.
In the top 10 list, including the next five States (Bihar, Assam, Karnataka, Delhi and Maharashtra), as per the increased quantity, they have a combined share of 80.6 per cent in the quantity raised last Friday.
Fresh arrival in MP
Out of 5 lt of wheat offered, FCI was able to sell 4.98 lt on Thursday. Despite 17,000 tonnes of wheat raised for Punjab and Uttar Pradesh each, the offtake was 100 per cent. But prices softened to ₹2,520-2,985/quintal (lowest-highest bid prices) from ₹2,958-3,159/quintal last week in Uttar Pradesh. In Punjab, prices dropped to about ₹2,600-2,850/quintal (as per industry sources) from ₹2,880-3,100/quintal.
On Thursday, the lowest-highest bidding prices were ₹2,477-2,909/quintal in Rajasthan, ₹2,560-2,800 in Chhattisgarh, ₹2,592-3,046 in Maharashtra, ₹2,609-3,056 in Odisha, ₹2,690-3,100 in West Bengal, ₹2,703-3,270 in Assam, ₹2,724-3,029 in Uttarakhand, ₹2,565-3,000 in Tamilnadu and ₹2,790-3,107 in Jharkhand.
In Madhya Pradesh, prices of successful bidders were in the range of ₹2,300-2,795/quintal against ₹2,300-3,120/quintal on February 19 auction. The State has received supply of over 95,000 tonnes of wheat in the past one week in the agriculture market yards (mandis) as fresh crop has arrived. Khandwa, Ujjain, Sehore, Ratlam, Dhar and Dewas are some of the districts where arrivals were 6,000 tonnes or more and farmers are receiving in the range of ₹2,800-3,050/quintal, on an average.
Speculation over crop
The Agriculture Ministry had estimated wheat production at record 113.29 million tonnes (mt) for 2023-24 crop year (July-June) and it has fixed a target of 115 mt for current year.
“Already speculation has started in the market about the next wheat crop due to rising temperature in Madhya Pradesh and elsewhere. As the wheat crop has been getting affected continuously for the past three years, even if the scale of yield loss is debatable, a coordinated efforts by agriculture and food ministries with ICAR and private sector may be able to find a long-term solution,” an industry official said on February 26.
Pesident of state’s Roller Flour Millers’ Federation Naresh Ghai said Punjab millers need wheat to run their plants until April 15 when the new harvest will arrive. Currently, millers are depending on weekly auction as the average monthly capacity is about 2,400 tonnes whereas FCI is offering maximum 1,600 tonnes a month (400 tonnes cap in each auction), he said adding traders are offering Madhya Pradesh crop at ₹2,900-3,000/quintal mill delivery.