Will wheat prices rise as a result of the Ukraine conflict, changing the dynamics in India’s agricultural markets, as private traders buy more wheat, the winter staple, from farmers than in past years, anticipating strong export demand. On the other hand, compared to the same period in 2021, government purchase at minimum support prices (MSP) has been slow.
However, according to the latest official updates from the Centre’s food department, the government has so far acquired 6.9 million tonne of wheat from 586,000 farmers, for whom minimum payments of approximately Rs 1,400 crore have been paid.
Wheat farmers in India are considering selling to exporters rather than selling to the government at the minimum support price, as the main commodity is trading at a premium globally due to the Ukraine conflict. As a result of the Russia-Ukraine situation, worldwide wheat prices have risen, allowing Indian farmers to bypass government procurement at minimum support prices in favor of higher rates offered by private actors.
Russia and Ukraine account for 27.6% of global wheat exports, according to data from the US Department of Agriculture’s official website. The situation between Russia and Ukraine triggered the shutdown of ports in the Black Sea, restricting global supplies. Exports of the staple from India benefited as a result.
Inflation is rising in India as a result of the Russia-Ukraine conflict. With the surge in price, fuel costs have shaken the market. Essentials, particularly veggies and eatables, are also rising in price. However, the question is whether it would have an impact on wheat prices too in India.
