Government Procurement at MSP in Full Swing, but Wheat Prices Crash in Mandis
22 April 2025, New Delhi: As the arrival of the new wheat crop picks up pace in agricultural markets across the country, prices have seen a sharp decline. According to traders, milling-quality wheat prices have fallen from ₹3,200–3,400 per quintal a month ago to ₹2,450–2,600 per quintal. With expectations of a bumper harvest and better-quality grain entering the markets, further softening of prices is anticipated.
As per data from the Ministry of Agriculture, wheat production for the 2024–25 crop year (July–June) is estimated to reach a record 115.3 million tonnes, which is 2% higher than the previous year. Wheat was sown across 32 million hectares this season, up from 31.56 million hectares last year. Harvesting is at its peak in Punjab, Haryana, and Uttar Pradesh. According to the Ministry of Food, as of Thursday, 13.48 million tonnes of wheat had arrived in mandis, compared to just 6.59 million tonnes during the same period last year.
Prices Hovering Around MSP
Traders say that wheat prices this season are likely to stay close to the Minimum Support Price (MSP) of ₹2,425 per quintal, as arrivals are expected to increase further in the coming weeks. Navneet Chitalangia, President of the Roller Flour Millers Federation of India, stated, “This year’s wheat production is higher than last year, and the quality of the incoming grain is also better.”
Additionally, the decline in prices is expected to help rein in wheat inflation, which stood at 9% in March 2025. The wheat processing industry has pegged this year’s output at around 110 million tonnes, up from 105–106 million tonnes last year.
Government Procurement Gains Momentum
In the ongoing 2025–26 marketing season (April–June), the government has ramped up wheat procurement at MSP. So far, 8.35 million tonnes of wheat have been procured from major producing states such as Madhya Pradesh (4 million tonnes), Haryana (2.98 million tonnes), Punjab (0.52 million tonnes), and Rajasthan (0.48 million tonnes). This is 92% higher than the same period last year. Traders estimate that the government will easily meet its procurement target of 31 million tonnes this year—the highest since the 2021–22 season.
After a record procurement of 43.3 million tonnes in 2021–22, purchases dropped to 18.8 million tonnes in 2022–23 due to lower production. However, procurement rebounded to 26.2 million tonnes in 2023–24 and 26.6 million tonnes in 2024–25.
FCI Holds Ample Stock
The Food Corporation of India (FCI) currently holds 15.56 million tonnes of wheat, significantly higher than the buffer stock norm of 7.46 million tonnes for April 1. FCI supplies around 18.4 million tonnes of grain annually for welfare schemes. The additional procurement will help stabilize market prices through open market sales and maintain buffer stocks.
Bonus Announcements and Stock Disclosure
The governments of Madhya Pradesh and Rajasthan have announced bonuses of ₹175 and ₹150 per quintal, respectively, over and above the MSP. Additionally, the Ministry of Food has directed traders, wholesalers, retailers, and processors to declare their wheat stock levels on a weekly basis starting early April. This move follows the removal of stock limits on March 31, 2025.
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