The fourth month has begun for the farmers’ movement on the borders of Delhi. In such a situation, everyone will keep an eye on the prices of the upcoming rabi crops. Due to the steep fall in the prices of rabi crops, farmers may get further dissatisfaction, which can spread the fire of agitation. Wheat, mustard and gram are the major crops that will be harvested in the next few weeks.
Interestingly, all these crops are grown in the same areas, which are the main centers of the peasant movement. These include Punjab, Haryana, Rajasthan, parts of Uttar Pradesh and Madhya Pradesh. Wheat is the most commonly grown food grain in the Rabi season. Government agencies purchase large quantities of it at a predetermined minimum support price (MSP). How much and fast the government purchases wheat will determine its prices.
Farmers are agitated and this time there is a possibility of heavy crop production, so there is no possibility of purchasing wheat in the marketing season 2021-22. According to the previous estimates of the Central Government, wheat has been sown on 3.46 crore hectares this year, which is about three per cent more than the previous year. The Center has fixed MSP of Rs 1,975 per quintal for the marketing season 2021-22.
In the current marketing season, the Center had purchased about 39 million tonnes of wheat from farmers and Punjab and Madhya Pradesh contributed 13–13 million tonnes of car to the central reserves. However, experts and market experts have different opinions about two other major crops grown in the Rabi season – mustard and gram.
In the case of mustard, most believe that the prices of this oilseed are likely to remain above the MSP of Rs 4,650 per quintal as prices of all oilseeds continue to rise. Their gram prices will depend on how the center intervenes to stabilize prices and ensure good returns to producers.
BV Mehta, executive director of the Solvent Extractors Association of India (SEA), told Business Standard, “Mustard prices remain high at this time as domestic demand remains good and all oilseeds are up. One reason is that the remaining stock in the new season starting from March 15 is expected to be just 2 to 4 lakh tons, while its normal level is 5 to 8 lakh tons. Although prices may come down from the current highs, they will not fall much as demand remains strong.
Mehta estimates that mustard prices will be significantly above MSP. These can be above Rs 5,000 per quintal. He said, ‘The demand for mustard is increasing in many areas as it is considered to be a disease resistant product against corona. This will keep the prices high. In the Rabi season 2020-21, oil mills crushed 75 to 77 lakh tonnes of mustard. According to industry estimates, mustard production is estimated to be around 9 million tonnes next season.
Gram is the most grown pulses in the country. Regarding this, traders said that the major producing states like Madhya Pradesh, Rajasthan, Maharashtra and Gujarat are expecting a slight decline in production due to no rain after the monsoon. Despite this, if the government did not make a good purchase, it would be difficult to cross the MSP of Rs 5,100.
Sanjay Periwal, managing director of Ashpee Mediters, a commodity trading company and member of the Indian Dalhbans and Grains Association (IPGA), said, “If the center purchases at least 15 to 17 lakh tonnes of gram to stabilize the market, then its prices May be around MSP. The business world had predicted that the production of gram would be 8 million tonnes in 2019-20, which is much lower than the government estimates of 115 lakh tonnes.