India's early wheat procurement strategy has resulted in 31% of the March arrivals being purchased by the government, a significant increase from less than 13% during the same period last year. This surge in procurement, with 2.56 lakh tonnes (lt) secured by the end of March, is notably higher than the previous year's figure of approximately 98,500 tonnes. The majority of this procurement came from Madhya Pradesh, with smaller quantities from Rajasthan and Uttar Pradesh. This proactive approach signals the government's intent to manage supply effectively and potentially exceed its procurement targets, contrasting with the lower procurement volumes of the past two seasons.
The government's ambitious procurement target for the 2023-24 season stands at 37.29 million tonnes (mt), aiming to bolster the Central Pool's reserves, which are at their lowest since 2017. With wheat production estimated at 112.02 mt for the crop year, the government's strategy involves early and aggressive procurement, starting unusually in March, to ensure sufficient reserves. The Indian Meteorological Department's forecast indicates favorable weather conditions for wheat production, especially in major producing states, further supporting the government's procurement objectives.
Market dynamics indicate that farmers are receiving prices at or above the Minimum Support Price (MSP), with some regional variations influenced by state bonuses and market demand. In Uttar Pradesh, for instance, market rates are significantly above the MSP, reflecting strong local demand.