Covid-19 impact: Gujarat’s wheat supplies to southern markets disrupted

Panic triggered by the spread of the Covid-19 virus has clouded the prospects of a good harvest seen in key rabi crops such as wheat, jeera (cumin seed) and dhana (coriander) among others.

Gujarat, which is expected to harvest about 4.03 million tonnes of wheat in 2019-20, a little less than double of 2.3 mt reported for the year 2015-16.

Price falls

But the increased wheat production in the State is not likely to fetch anything good for the farmers, as they fear prices to be suppressed by supply disruptions caused by Covid-19 scare in parts of the country.

“Good rains and ample water availability has boosted the yields of key rabi crops such as wheat, jeera (cumin seed) and dhania (coriander seed). But what we have observed is that the prices are going down due to the lower offtake and increased arrivals,” said Ramesh Bhorania, a farmer based in Rajkot said.

In Rajkot markets, wheat (new crop) prices were quoted at ₹2,200 per quintal on February 18, which fell to ₹1,742 on Monday or about 20 per cent within a month, leaving farmers dejected.

Supply disruption

Trade sources revealed that another factor causing the fall in prices is the disruptions in supplies to southern States, which are big buyers of Gujarat’s wheat. Saurashtra sells its wheat to Karnataka and Kerala through sea route. But amid the looming uncertainty over the coronavirus spread, the trade has been impacted and the buyers have halted the purchases.

“Karnataka and Kerala are among the key buyers of Gujarat’s wheat (a special hybrid variety). But buyers in those States are apprehensive about the demand and our traders are also concerned about the uncertainty over shipments. Prices have fallen by about ₹500 a quintal and there may be further dip if the arrivals continue without matching demand from buyers,” a trade source told BusinessLine .

Notably, Gujarat had recorded 73 per cent jump in the wheat acreage to 13.95 lakh hectares in 2019-20, as against 8.07 lakh hectares a year earlier.

Record wheat output

With sufficient water availability and favourable weather conditions, farmers anticipated good yields, taking the State’s wheat output to record levels. India’s wheat production in 2019-20 is expected to touch an all-time high of 106 million tonnes.

Arrivals of new wheat crop has begun in huge quantities. But the supply chain appears to be disrupted due to bleak export prospects and reduced demand amid multiple lockdowns and restricted movements, impacting travel, tourism and routine industrial consumption.

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