In 2022-23, wheat exports were under OGL. In open trade, the global wheat prices dictated Indian prices. In face of Ukraine crisis, Global Wheat prices topped US $ 2100/MT. Indian prices too rose shortly from Rs. 2850 to Rs. 3200/quintal. After many years, farmers were able to get prices well above MSP.
It is when Government intervened and put restriction in Wheat exports. As a result, sharp decline in domestic prices of Wheat were seen. Global Wheat prices have since been declining as can be seen in Fig. 1. Domestic prices have however ruled steady despite several restrictions imposed for stock control. Dwindling stocks at the FCI and firm domestic demand has kept Indian prices steady.
With El Nino looming large, lack of rains in January and higher
temperature predicted in coming weeks could reduce the Wheat output. Market may
continue to be firm for Wheat.