Indian Wheat Prices Soar as Demand Rises in South and West Asia

According to authorities and industry analysts, India has become a key wheat supplier for nations in South Asia and the Indian Ocean Region, namely West Asia, as global wheat prices have risen to near eight-year highs. India exported 19.86 lakh tonnes of wheat during the April-August period compared to the 2.63 Lakh tonnes that were exported a year ago. 

This sudden spike in prices was also experienced by cotton and soybean farmers too whose prices did well in the International market. This year the MSP of Wheat set by the government is Rs 1975  per quintal for the 2021-2022 year however the International price for Wheat currently is Rs 2100 per quintal. 

This itself shows the increase in demand for agricultural produce in the international market however the disruptions in logistics continue to pose a challenge despite high market demand for the produce.  

Freight charges have risen considerably since the start of COVID, making it impossible for exporters to fulfil their needs. The cost of sea freight has risen, but the number of vessels available has decreased, resulting in irregular cargo timetables.

While the cost of air freight has decreased since the initial lockout last year, only cargo aircraft are now operating, leaving exporters with restricted alternatives, creating a dilemma for exporters of perishable goods with short shelf lives. Because of the logistical challenges, the supply of packaging material has been compromised, resulting in an overall rise in operational expenses. 

Though the increase in prices is good it does also show the heavy blow that Covid has struck our Supply Chain industry. This shows how we need to bring in vehicles running on alternative sources of energy even in the supply-chain industry and how new innovations should be employed to construct a robust supply chain that in the future might not get so affected by such an event.

Though the hike in prices of crude oil which appeared in the third quarter of 2021 is expected to remain till the start of 2022, this is no good news as it will surely increase the inflation in the world market and end up straining the international economy as a whole.  

To get insights on this very issue Krishi Jagran will have an Fb live session with Pankaj Khandelwal the chairman of INI farms to get his views on this subject on October 26 2021 at 12 pm tune in to Krishi Jagran's FB live to understand more about this.