Russia-Ukraine War impact: At Rs 2,300 per quintal, wheat sells above MSP in Punjab

Tribune News Service

Ruchika M Khanna

Chandigarh, March 29

In spite of a production target of 132 lakh metric tonnes — similar to last year — the Punjab Government is expecting to procure at least 10 lakh metric tonnes of wheat less than what it procured last year.

This is because the government anticipates that farmers will hold back some wheat in the hope of getting higher prices from private traders later. The increase is expected because of a global shortage of wheat due to the ongoing Russia-Ukraine war, and subsequent resultant demand for Indian wheat. Today, commission agents in different mandis of the state said the market price of wheat (old stocks) was between Rs 2,250 and Rs 2,300 per quintal. This year, the minimum support price (MSP) of wheat is Rs 2,015 per quintal.

Globally, as wheat from the two war-torn countries — which are amongst the largest producers — becomes unavailable, prices are expected to zoom much beyond the MSP. It is believed based on the holding/storage capacity of each farmer, they will hold back stocks to be sold in open market at higher rates.

“For now, only flour mill owners are buying wheat from mandis, wherever the stocks are available. Once the arrivals begin next week, we expect several foreign players to come and start buying wheat,” said Vijay Kalra, a prominent commission agent.

Officials in the Food Corporation of India told The Tribune though the government is preparing for market arrivals of wheat to the tune of 130 lakh metric tonne, in the procurement season that begins on Friday, it is estimated only 122 lakh metric tonne will be procured by the government agencies, including the FCI. Officials in the FCI also say they are working on creating space to store the wheat procured, and more and more stocks are being transferred to the recipient states.

Eyeing profit, farmers may hoard grain

• The government expects farmers to hold back wheat in the hope of getting higher prices from private traders later
• As wheat from war-torn Ukraine and Russia, amongst largest producers, becomes unavailable, prices are likely to zoom
• On Tuesday, market price of wheat (old stocks) was Rs2,250-Rs2,300/quintal against MSP of Rs2,015/quintal

Flour mills making purchase

For now, flour mill owners are buying wheat. Once arrivals begin next week, we expect foreign players to make purchases. — Vijay Kalra, a commission agent

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