India is the second-largest wheat producing country in the world after China. As per the statistics, Uttar Pradesh, Madya Pradesh and Punjab are the major Wheat producing states of India. Accounting for around 32.42% of the entire wheat production of the country, Uttar Pradesh leads the wheat production of the country.
According to the government officials, the production of wheat would reach new heights and would record at 112 million tonnes in the crop year 2022-23 (July-June). As per the data of the agriculture ministry, in last year i.e. 2021-22, the wheat production got affected due to heat waves and it declined to 106.84 million tonnes. In 2022-21, India had produced 109.59 million tonnes. The wheat production in the current year is better due to higher acreage and appropriate weather conditions.
Last year, due to the Russia-Ukraine war, as well as bad weather conditions, the demand for Indian wheat increased and the wheat prices in the domestic markets shot up. Therefore, the GOI imposed a ban on the export of wheat and wheat flour in May 2022 to calm down the domestic price inflation.
Selling Price Of Wheat And Wheat Flour
According to the report submitted by the GOI on Friday to the Rajya Sabha meeting, the average selling price of wheat flour increased by 31% whereas the selling price of mustard oil increased by 71% amid 2018-2022.
The government also provided the average retail pricing of around two dozen important items in a written response. According to the data, wheat prices have risen by 25% since 2018, while rice prices have boosted up by 23% in the previous five years.
The written response of the Hon’ble Minister of State for Food and Consumer Affairs, Mrs. Sadhvi Niranjan Jyoti includes the “year-wise all-India average retail prices of 22 commodities, including atta (wheat flour), onion, rice, and potato over the previous five years.”
The minister stated that the GOI takes multiple efforts on a regular basis to elevate the domestic supply of food crops and stabilize the pricing of vital food staples.
Hon’ble Minister of State for Food and Consumer Affairs, Mrs. Sadhvi Niranjan Jyoti also stated that, the prices could cool down by releasing the wheat flour from the buffer, monitoring the stocks declared by entities to prevent hoarding, imposition of stock limit, as well as necessary changes in trade policy instruments such as modifications in import quotas, rationalization of import duty, restrictions on commodity exports, and so on.
According to the report, the average retail price of rice in key Indian cities increased from Rs 30.05 per kg in 2018 to Rs 37.03 per kg in 2022.
The retail prices of wheat in the market increased from Rs 24.2 per kg to Rs. 30.15 per kg from 2018 and 2022, while the cost of wheat flour increased from Rs 26.43 per kg to Rs. 34.5 per kg.
Effect Of Russia-Ukraine War On Retail Price Of Agro-Commodities
The war between Russia and Ukraine has generated turmoil in the economy of the world and it has also been a major reason to mount pressure on commercial wage inflation, notably for grains.
The minister stated that, “the prices of wheat have surged since both Russia and Ukraine are significant exporters of wheat internationally. “With the conflict scenario and decreased supply of wheat in the global market, wheat demand grew significantly, resulting in an increase in the prices of wheat as well as wheat flour. The demand of Indian wheat and wheat flour as well as other agro-commodities also surged which led the GOI to conduct an e-auction for the sale of wheat. The e-auction proved beneficial for Indian traders and Wheat Exporters since they had received great profit through the sale of wheat and wheat flour.
Mrs. Sadhvi Niranjan Jyoti, Hon’ble Minister of State for Food and Consumer Affairs stated that wheat exports were prohibited by the government in May of last year. It recently decided to offload around 30 lakh tonnes of wheat through the Open Market Sale Scheme (OMSS) and sales to state governments, the NCCF (National, Consumer, Cooperative Federation), Kendriya Bhandar, state cooperatives/federations, NAFED, and others in order to bring down the prices of wheat and wheat flour.
Price Increase Of Agro-commodities From 2018 To 2022
Not only the prices of wheat and wheat flour have increased in the past year but also the export price of other agro-commodities such as ghee, pulses, milk, etc have also increased.
As per the report, the average selling price of gram dal in 2022 grew from Rs 66.47 per kg to Rs 73.66 per kg in 2018, whereas the price of tur (arahar) dal jumped from Rs 71.07 per kg to Rs 107.29 per kg in 2018.
Urad dal prices increased from Rs 70.83 per kg to Rs 106.57 per kg. Moong dal prices jumped from Rs 73.46 per kg to Rs 102.63 per kg, while masoor dal prices spiked to Rs 96.21 per kg from Rs 61.29 per kg.
The retail prices of edible oils have also surged since 2018. The selling price of groundnut oil increased from Rs 125.29 per kg in 2018 to Rs.189.24 per kg.
Prices of mustard oil increased from Rs 106.16 per kg to Rs 181.98 per kg. Retail price of Vanaspati spiked up from Rs 80.32 per kg to Rs 150.24 per kg.
Price of soybean oil rose from Rs 89.34 per kg to Rs 158.41 per kg. The average retail price of sunflower oil increased from Rs 96.28 per kg to Rs 178.2 per kg. Selling price of palm oil was Rs 76.68 per kg and it increased to Rs 134.83 per kg.
To manage the retail price of edible oil, the GOI decreased its basic import tax on crude soybean oil, crude palm oil as well as crude sunflower oil to zero and agri-cess on all these oils has been lowered to 5%.
The basic tax on refined sunflower and soybean oil; has been decreased to 17% from 32.5%, whereas the duty on refined palm oil has been lowered to 12.5% from 17.5%. According to the ministry, the import of refined palm oil is in the ‘Free’ category.
The average retail prices of vegetables also surged in 2022 as compared to prices in 2018. Price of potato was up at Rs 25.22 per kg in 2022 from Rs 19.02 per kg. The retail rates of Onion inched up from Rs 23.64 per kg to Rs 28 per kg, while price of tomato increased significantly from Rs 21.82 per kg to Rs 36.61 per kg.
According to official statistics, sugar prices jumped marginally from Rs 38.92 per kg to Rs 41.87 per kg , while gur costs rose to Rs 49.31 per kg from Rs 43.11 per kg.
Milk prices rose up from Rs 42.31 in 2018 to Rs 52.81 per liter last year. Price of tea increased to Rs 282.48 per kg from Rs 209.19 per kg.
Lastly, the average retail price of salt would rise up from Rs 15.22 per kg in 2018 to Rs 20.25 per kg in 2022.
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