India’s Wheat Acreage Drops 15%: Impact on Supply and Prices
India’s Wheat Acreage Declines 15% Due to Delayed Rabi Sowing
India's wheat acreage has dropped by 15% this rabi season, raising concerns about the potential impact on supply and prices. As of November 8, only 4.13 million hectares (Mha) of wheat have been sown, compared to 4.88 Mha last year. This significant decline in wheat acreage could disrupt the wheat supply chain, and the government is closely monitoring the situation to achieve its wheat production goal of 115 million tonnes (Mt) for the season.Wheat Planting Areas and Sowing Challenges in Key Regions
Madhya Pradesh, a major wheat-growing state, has seen a significant decline in wheat sowing acreage. By November 8, only 1.06 Mha of wheat had been sown, down from 2.66 Mha last year. This reduction in the area under wheat cultivation could be adjusted as delayed data updates become available.In contrast, Uttar Pradesh has seen a slight increase in its wheat sowing acreage, with 0.94 Mha sown compared to 0.93 Mha last year. Both Punjab and Haryana have reported higher wheat sowing acreage, with 1.41 Mha and 0.36 Mha sown, respectively, up from 0.83 Mha and 0.11 Mha last year. Rajasthan, however, trails with only 0.19 Mha sown compared to 0.21 Mha the previous year, reflecting a small decline in its wheat cultivation area.
Haryana and Rajasthan Increase Wheat Planting Areas
Recent reports indicate that Haryana has surpassed 0.50 Mha in wheat sowing acreage by November 12, marking a significant increase from last year. Meanwhile, Rajasthan has covered over 0.30 Mha in wheat sowing, bringing it closer to last year’s levels of acreage. These improvements in wheat farming areas could help mitigate some of the declines seen in other regions.Despite the regional disparities in wheat sowing acreage, the government remains hopeful of achieving its wheat production target, supported by favorable winter weather forecasts. The estimated wheat production for the 2023-24 season is expected to reach a record 113.29 Mt.
Wheat Prices Surge Amid Limited Wheat Supply
Wheat prices are rising, particularly in southern India, with prices reaching ₹34,000 per tonne for railway goods shed delivery due to limited availability from key wheat-producing states like Madhya Pradesh, Rajasthan, and Haryana. Most wheat is now sourced from Uttar Pradesh. In Delhi, wheat prices have risen to ₹3,200 per quintal (approx. USD 3.87 per kg).The government’s decision to withhold the Open Market Sale Scheme (OMSS) this fiscal year has exacerbated price increases. Combined with a lack of wheat imports at lower duties, this has further constrained the supply. The average wheat price at Agricultural Produce Marketing Committee (APMC) yards is currently ₹2,811 per quintal (approx. USD 3.37 per kg).
Challenges and Opportunities in Wheat Sowing and Acreage
The reduction in wheat acreage presents both challenges and opportunities. To encourage farmers, the government has set a Minimum Support Price (MSP) of ₹2,425 per quintal (approx. USD 2.91 per kg). However, the reduced acreage could impact overall production targets.Farmers in states like Madhya Pradesh and Rajasthan need to accelerate sowing in the coming weeks to close the gap. If favorable weather conditions persist, India may still achieve a successful wheat harvest.
Conclusion: Monitoring Wheat Acreage Trends
For stakeholders in the wheat market, closely monitoring wheat acreage trends and price movements is crucial. The 15% drop in India’s wheat Farmlandmay drive prices higher due to limited supply unless sowing accelerates. Wheat traders and flour millers should consider delaying large purchases until they receive clearer updates on sowing progress.Click here to reach our trading platfrom CMBroker
