A possibility of erratic fluctuations in the grain market due to stock constraints in wheat

Bhoo Bazar - Dilip Shah

Amid export restrictions, the government has decided to export 20 thousand tonnes of wheat to Afghanistan

The wheat market in the country has recently witnessed a rapid reversal of trends. Monsoon season is near and experts are fearing that Al Nino will have an effect on the monsoon this year. At such a time, keeping in view the various important elections coming up, the government recently imposed various restrictions on wheat in the form of stock limit and there have been indications that the market players have been caught napping. Such stock limit is imposed on retail traders and wholesalers. As a result of such stock limit, the market price may decrease in the form of immediate effect, but after that, due to such stock limit, conditions like ceiling-shortage will be seen frequently in wheat and due to this, irregular fluctuations in the wheat market price will also be seen, grain market informants were showing the possibility. However, according to the sources of The Grain, Rice and Oilseeds Merchants Association, which represents the grain market, the government itself has imposed five percent GST and one percent APMC market cess on essential commodities like grains. It is also necessary for the government to remove the tax burden that it imposes. The government provides wheat, rice, grain etc. Giving. This also causes a lot of wastage of grain. In fact, the government should provide cash subsidy to the poor through direct benefits so that wastage of food grains can be prevented, market sources said. Years ago we removed the reliance on wheat imports in the country and in recent years wheat stocks have also been limited after curbs were imposed on wheat exports from the country instead of wheat imports. In the initial months of the war between Russia and Ukraine, wheat prices in the world market rose rapidly due to the decrease in the supply of wheat from these countries in the world market, and due to this, due to a significant increase in the export of wheat from India, the Indian government had to restrict the export of wheat from the country to maintain the supply of wheat at home. Sources in the grain market said that the stock has also been limited.

Meanwhile, the government's procurement of wheat has increased this year. By the end of May, the government has procured wheat which was 1.88 lakh tonnes in the entire season in the previous wheat season. Due to adverse weather conditions in March and April, the wheat crop was affected and due to quality damage, the government had to relax the quality standards for procurement of wheat. In the month of April, the government made significant purchases of wheat from Punjab and Haryana besides Madhya Pradesh. Wheat farmers during this period were seen giving poor wheat to the government while good wheat was being given to traders in the open market. The informants were showing the possibility that the total procurement of wheat by the government may increase to 300 lakh tonnes this year. Wheat is sown in India in October and November while the wheat crop is ready in March. The wheat crop in India this year is estimated to be around 1126 to 1127 lakh tonnes in the season of 2022-23. In the country in the season of 2021-22, this figure was recorded as 1095 to 1096 lakh tonnes. India recently imposed a stock limit on wheat. After the Indian government imposed restrictions on wheat exports, the prices of wheat in the world market went very high. As the price of wheat in India increased by about 7 to 8 percent in May, the government decided to limit the stock of wheat recently. Such a limit was placed on wheat stocks in the country almost 15 years ago. The recently imposed stock limit on wheat stocks will continue till March next year, government sources said. Despite the restrictions on export of wheat, recently the government has decided to send 20 thousand tons of wheat to Afghanistan. Government sources said that people are facing shortage of wheat in Afghanistan and this wheat is being sent from India to Afghanistan for humanitarian purpose. Before this, the Indian government had decided to send 10 to 11 lakh tonnes of wheat to Nepal, Indonesia, Senegal and Gambia.