Market arrivals of the wheat crop have begun in Madhya Pradesh and Gujarat, leading to a softening trend in prices of the cereal, which had spiked in recent months on supply concerns.

Also, the increase in grain imports from countries such as Australia and Ukraine, which are expected to touch 5 million tonnes this year, is seen weighing on domestic prices.

In Indore, the benchmark market for the cereal, daily arrivals are hovering between 40 and 50 quintals, whereas in the mandis of Gondal and Rajkot in neighbouring Gujarat, arrivals are ranging between 40 and 80 quintals.

Wheat acreage has risen this year to 317.81 lakh hectares against last year's 297.25 lakh ha and conducive weather is seen boosting the prospects of a good harvest.

Trade sources in Indore said prices of the new wheat are ranging between ₹1,600 and ₹2,000 a quintal in various markets, similar to last year, depending on the quality and the moisture content. Arrivals are expected to pick up after Holi in Madhya Pradesh, where farmers have brought additional acreage of over 1 million hectares under wheat cultivation.

Similarly, in Gujarat, prices are hovering between ₹1,850-2,050. In Delhi, wheat prices are trading lower at ₹2,000 compared to the ₹2,200 levels in mid-January, reflecting a softening trend on new crop arrivals and increased imports. The February contract on the NCDEX was quoting lower at ₹1,767.

Bumper crop Given the adequate availability of imported wheat and expectations of a bumper domestic crop, demand and buying interest in new wheat from millers and stockists is almost negligible. “Demand is expected to pick up only from mid-March,” said Heera Lal, a wholesale wheat trader in Indore.

Considering record imports and a bigger crop, farmers are staring at lower prices for wheat this year. “We fear the prices will drop due to the sentiment of oversupply after the increase in imports. Futures also indicate a bearish trend — when the arrivals pick up later this month, there will be downward pressure on prices. We have sown wheat but the harvest will take place later this month,” said Tarsibhai Ranchhodbhai Patel from Padadhari of Rajkot district.

Higher imports Sharing similar views, Vitthal Dudhatara, co-general secretary, Bhartiya Kisan Sangh (BKS) in Gujarat, said: “Production is likely to be higher but the harvest will begin after 15-20 days. Only then can we expect some clarity on prices. We believe prices will be lower due to huge imports likely to take place. At the association level we have strongly opposed the Centre’s decision to cut down the import duty and opening doors for a flush of imports.”

Millers estimate that India has so far, imported anywhere between 3 and 4 million tonnes, while over another million tonnes has been contracted by millers. “About 22 ships bringing in some 54,000 tonnes each are headed to Tuticorin from Australia,” trade sources said.

With inputs from our correspondent in Indore

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