Mandi prices of key rabi crops above MSP on strong demand

As market arrivals have peaked, mandi prices of key rabi crops — wheat and mustard — are ruling above the respective minimum support prices (MSPs). In the case of wheat, strong demand from export markets has pushed the prices up, while domestic demand for mustard is high.

Chana (gram), another winter crop, has been ruling below MSP for the last few weeks because of bumper harvest and higher buffer stocks with the government. The benchmark prices of key vegetables such as tomato and potato are currently ruling above the prices prevailing a year ago because of lower production in the current crop year (2021-22). Onion prices have declined sharply below last year’s level because of a robust rabi harvest.

Traders told FE that for mustard, the biggest domestic oilseed variety, prices at Bharatpur mandi, Rajasthan, are currently ruling around Rs 6,800 per quintal against the MSP of Rs 5,050 a quintal, while wheat in Sehore mandi, Madhya Pradesh, is currently being sold at Rs 2,150 a quintal against MSP of Rs 2,015 a quintal.

“Despite it being peak arrival season, farmers are slowly bringing in their produce to mandis, anticipating higher prices in coming months,” Suresh Jain, secretary, mustard mandi board, Bharatpur, said. The arrival in the dedicated mustard mandi is currently around 5,000 quintal daily which was more than 8,000 quintal a year ago.

Mustard prices, despite the anticipation of a record seed production of 11.45 million tonne (mt) in 2021-22 crop year (July-June), have been mainly driven by anticipation of disruption of imports of sunflower oil from Ukraine and Russia. Mustard accounts for 39% of India’s domestic edible oil production.

However, for chana, which has a share of around 45% in the total pulses production, mandi prices at Latur, Maharashtra, are around Rs 4,800 a quintal at present, against the MSP of Rs 5,230 a quintal. For building up buffer stocks, the farmers’ federation National Agricultural Cooperative Marketing Federation of India (Nafed) has commenced MSP procurement operations in key producing states. Around 0.65 mt of chana has been procured from the farmers so far by Nafed.

“Mandi prices are driven by factors including surge in wheat exports, opportunities increasing because of global demand, rising domestic demand for edible oils” PK Joshi, former director (South Asia), International Food Policy Research Institute, said.

In the case of three key vegetables, while onion prices are ruling 25% less than a year-ago period at Rs 600 a quintal at Lasalgaon, Maharashtra, the benchmark prices of potato at Agra, Uttar Pradesh and tomato prices at Kolar, Karnataka are ruling 19% and 78% more than previous year at 860 a quintal and1,070 a quintal, respectively.

Traders said rabi onions, which account for around 60% of the total production, will meet the domestic demand till October, when early kharif crop arrives. There are no supply constraints anticipated in the coming months. Potatoes are currently being stored in the cold storage for meeting supply needs till October while tomato prices are witnessing periodic fluctuations depending on supplies.

Experts say that higher prices realised by the farmers is expected to boost their income and help brighten forthcoming Kharif prospects given that India Meteorological Department has predicted ‘normal’ monsoon this year.

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