Government Wheat Procurement Target Hard to Achieve, Market Prices Higher than MSP

28-Jan-2025 09:07 AM

Government Wheat Procurement Target Hard to Achieve, Market Prices Higher than MSP
★ Impact of Bonuses in States: If states like Madhya Pradesh and Rajasthan announce bonuses, it may affect government procurement in other states. For instance, demand for wheat from Uttar Pradesh might shift, as seen in the past two years.
★ Low Procurement in 2022-23: Due to high prices, procurement dropped to a 16-year low of 188 lakh tons.
★ Inflation Trends: From January to March 2023, wheat inflation peaked, leading to procurement of 260 lakh tons. In February 2023, wheat inflation reached 17%, and flour inflation hit 19%, although it eased by March.
★ Previous Year Procurement: In 2022, states like Maharashtra, Rajasthan, and Madhya Pradesh had announced government procurement. A total of 266 lakh tons of wheat was procured.
★ Central Government Directive: The Center has urged five major states to increase wheat procurement to ensure enough stock for the Public Distribution System (PDS).
★ New Crop Arrival: New wheat harvests will start arriving in markets by the end of March.
★ Current Sowing Area: As of the latest government data, wheat sowing has exceeded 324 lakh hectares this season, higher than the five-year average of 318.33 lakh hectares and last year’s 315.63 lakh hectares.
★ Production Outlook: Favorable weather conditions may result in a good harvest. However, as new crops flood the markets, prices could drop sharply.