The Hindu Business Line : Wheat prices a tad above MSP as arrivals begin

Grain scenario
Current prices in the markets are Rs 654-660 a quintal.
In Uttar Pradesh, prices are above Rs 670 in some places.
Trade is picking up the scarce arrivals

Chennai , April 4

Arrivals of the current year's wheat crop have begun but industry players and Government officials expect it to gather momentum in the next week or so.

With the arrivals increasing, prices of wheat have begun to dip, though they are still above the minimum support prices (MSP) fixed by the Centre.

"Wheat stocks have begun to arrive in Punjab markets. Arrivals are picking up," said Mr Vinod Kapoor, President of Wheat Products Promotion Society.

"Currently in Uttar Pradesh, wheat has begun to arrive in three markets, including Mathura and Kosi. The arrivals have been about 500-600 tonnes," said Mr Anirudh Agrawal of Agra Flour Mills.

Compared with last year, the arrivals have been either the same or a little more, according to Mr Agrawal.

Mr Kapoor and Mr Agrawal said the quality of the arrivals was good.

A Food Corporation of India official said the agency had begun procurement in States such as Madhya Pradesh but it was yet to pick up fully.

Hailstorms, which hit parts of North India early last month, have damaged the crop in Madhya Pradesh, whereas in Uttar Pradesh and Punjab the crop has been free of any damage.

Current prices

Asked about the prevailing prices, Mr Kapoor said they were a little above MSP in Punjab. "Currently, prices are ruling at Rs 654-660 a quintal over here," he said, adding that prices could come down to the MSP level once stocks begin flooding the market.For the current year, the Centre has fixed an MSP of Rs 650 a quintal.

Mr Agrawal said in markets such as Mathura, wheat was ruling above Rs 670 a quintal.

"There is good demand for wheat and the trade has been buying up the small arrivals," he said.

According to Mr Kapoor, traders could pick up wheat only if they offerprices above Rs 651 a quintal. "In Punjab, growers auction their produce and the starting price is Rs 651," he said. "But if the Centre enters the market, it will be able to definitely pick up wheat for its buffer stocks," he said.

Buffer stocks target

For the current year, the Food Ministry has targeted to buy 160 lakh tonnes. The Centre is confident of achieving the buffer stocks target and according to sources, the Union Food and Agriculture Minister, Mr Sharad Pawar's statement last week that the Union Government would import more wheat was basically to tone down the market's bullish sentiment.

Expecting a less-than-anticipated crop, the market has been bullish about wheat prices. Initially, the Centre had projected a crop of 75.5 million tonnes but it subsequently pruned it to 73.06 million tonnes. This is against last year's production of 72 million tonnes.

Meanwhile, wheat prices have tended to fall in wholesale markets.

In New Delhi, wheat dara was quoted at Rs 755-760 a quintal on Tuesday, from over Rs 900 last month.

In the futures market, wheat for April delivery was quoted at Rs 781 a quintal, while for May and June, it ruled at Rs 796 and Rs 811 respectively.

On NCDEX, April ruled at Rs 776.40, May at Rs 794.40 and June at Rs 819.20.