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Russia-Ukraine war fallout: Wheat price soars in open market, Uttar Pradesh farmers set to benefit
Wheat in Uttar Pradesh mandis is selling for up to ₹2300-2500 per quintal, which is much above the minimum support price fixed at ₹2015 per quintal
Driven up by the Russia-Ukraine war, the wheat price in the open market has gone much higher than the minimum support price (MSP) offered to Uttar Pradesh farmers .
This situation has emerged when the Yogi Adityanath government is gearing up to start buying wheat at MSP for the 2022-23 procurement season from April 1.
The continuing high market price of wheat is believed to be good for the farmers who will get a better price of their produce (possibly from private players) this year, according to those in the know of things. As for the state government, it will save a lot of money and effort that otherwise go into buying wheat from farmers at the MSP.
For now, the wheat prices in the international market have soared to a record high due to the ongoing Russia-Ukraine war, according to people in the know of things. Wheat in Uttar Pradesh mandis is selling for up to ₹2300-2500 per quintal, which is much above MSP fixed at ₹2015 per quintal.
Russia is said to be the biggest wheat exporter. Ukraine is also among the prominent wheat exporters in the world. With the two countries engaged in war, India is reaching out to other countries to export wheat.
“Since the wheat export from Russia and Ukraine has been hit due to the war between the countries, the wheat prices have soared in many countries, including India as they have increased wheat export,” an agriculture department official said.
Uttar Pradesh is the largest wheat producer in India. The state accounts for more than 30% of the country’s total wheat production. Wheat production has been projected to be higher in UP this year as well.
“If the market price of wheat continues to be higher than the MSP even after the new crop of wheat starts arriving in mandis, it will be a win-win situation for farmers and the government. The farmers will get a profitable price for their produce and the government will be able to cut on the subsidy bills,” said a food department official.
The government, he said, did not mind farmers selling their produce to private players as long as they got a price better than the MSP.
The food and civil supplies department is expected to give a presentation on the new wheat procurement policy in a meeting to be chaired by chief secretary DS Mishra here next week. The presentation will be made before the procurement policy for 2022-2023 is put before the Cabinet for clearance. The continuing high wheat prices in open market is also expected to be discussed in the meeting and factored into the final policy.
The new policy may fix the wheat procurement target at around 60-65 lakh MT for the year with special focus on purchase through the PoS (point of sale) machines.
In September 2021, the Centre fixed the wheat MSP for the 2022-23 procurement season at ₹2015 per quintal. This was ₹40 per quintal more than the ₹1975 per quintal last year when UP made the highest-ever MSP wheat purchase at around 58 lakh MT.
