Farmers Expect Better Wheat Harvest, but Traders Remain Cautious

Wheat crop in India is looking healthy overall, except for some localized concerns in parts of Rajasthan. Farmers expect yields to improve by about 10% compared to last year.

Official projections place total wheat production above 115 million tonnes (mt), while millers estimate around 110 mt. However, traders are more cautious, estimating production could be between 104-106 mt.

Good Weather and New Varieties Boost Yields

This year's strong wheat crop in India yield results from timely sowing, favorable weather, and widespread use of climate-resilient wheat varieties. Around 67% of total wheat acreage is planted with these improved seeds, significantly enhancing the crop's quality and resilience.

Wheat Harvest Picks Up Pace; Procurement Begins

Harvesting is progressing smoothly in states that started early:

• Gujarat: 30% harvested
• Madhya Pradesh: 20% harvested
• Rajasthan: 10% harvested

Rajasthan has already started procurement, purchasing 40 tonnes so far. Madhya Pradesh and Gujarat plan to initiate procurement shortly.

State Incentives Push Wheat Prices Above MSP

The government-set Minimum Support Price (MSP) for wheat is USD 0,29 per kg. Yet, states like Madhya Pradesh and Rajasthan offer additional incentives, pushing local wheat prices higher than MSP:

Millers Choose Transport Options Based on Costs

Flour millers in Kerala prefer buying wheat shipped by sea from Gujarat, whereas Karnataka millers favor wheat transported by rail and road from Madhya Pradesh due to higher shipping costs at Mangalore ports.

The government plans to procure 31,27 million tonnes of wheat, targeting key states to stabilize market prices and maintain domestic buffer stocks:

This procurement effort aims to maintain market stability and ensure sufficient supply for domestic consumption.