Wheat production in 2023: Amid soaring prices and stressed out granaries, India aims at record harvest of 112 MT

Vibha Sharma

Chandigarh, February 9

Amid soaring prices and stressed out granaries, India appears to be considering extending the ban on export of wheat to augment reserves and cool down the scaling domestic prices. Domestic wheat prices hit an all-time high of (Rs 32,500/tonne) in January—much higher than the MSP at which the Centre buys from farmers.

Notably, The Tribune on February 7 also reported that Punjab’s wheat granary stock had hit a new low following lesser than the targeted production last year and the quick flow of grains to recipient states from Punjab throughout the year.

In Punjab, godowns of the procurement agencies have 10 lakh metric tonnes (LMT) and the Food Corporation of India (FCI) just 6 LMT. With the government not releasing wheat under the Open Market Sale Scheme (OMSS), the wheat prices had gone up to over Rs 30 per kg last month.

Bumper crop in 2023

Currently, wheat stocks are at their lowest-ever and not just in Punjab. The stock of 171.30 LMT in the central pool this year is much lower than 330.12 LMT in 2022—a reason why the upcoming wheat procurement season is crucial to lift farm incomes, cool food inflation and replenish low wheat stocks.

In those terms, the year is crucial to ensure the Centre’s wheat procurement goes up.

Meanwhile, the good news is that India is expecting to harvest a bumper 112 million tonnes in 2023 while the domestic demand is estimated at around 105 MT.

Though the upcoming season appears promising, any shift in temperatures in March around the time harvesting begins has the capacity to affect the quality of grain. In those terms, the expected bumper harvest will depend upon the weather in the wheat-growing states in the next two months, especially around harvesting.

Last year, the wheat procurement saw a sharp drop due to vagaries of weather in Northwest India. The production dropped to about 95 MT due to heat waves in the growing states.

Reasons for shortage

Heatwaves as early as March in growing states of Northwest, including Punjab and Haryana, damaged the grains, affecting the output in 2022.

The extension of the Pradhan Mantri Garib Kalyan Anna Yojana and global wheat shortages in the wake of the Russia-Ukraine war are the other reasons behind the current situation.

The jump in exports due to the Russia-Ukraine war also saw a spike in local wheat prices, resulting in India banning exports in May.

The current ban is scheduled to be reviewed in April and a decision is expected around the end of March/ early April.

Wheat and climate

The heat waves in India are becoming frequent. Global warming backed by greenhouse gas emissions is resulting in intensity and frequency of heat waves increasing across the world and the trend has been continuing since 2010s.

According to Berkeley Earth, the last eight years were the warmest eight years and June 2022 the warmest June on land since records began in the mid-1800s.

As per the WMO, average temperature globally in 2021 was around 1.11°C above average world temperatures between 1850 and 1900—known as the “pre-industrial average”.

On February 6, 2023, the plains of the Northwest registered above normal day and night temperatures, according to the IMD data.

Politics and prices

India is sitting on the eve of the general elections next year and prices and inflation are the issues that the Opposition will raise in their election campaigns.

Higher food prices will also make the BJP-led government open to criticism in the run-up to state elections in as many as nine states, including Madhya Pradesh, Rajasthan, Karnataka and Chhattisgarh this year. The BJP has a one-on-one fight with the Congress in four crucial states.