WHEAT

GENERAL CHARACTERISTICS OF WHEAT

Wheat, one of the world’s three major cereal crops alongside maize and rice, has been cultivated since at least 9000 BC and is now grown extensively worldwide. It serves as a crucial source of dietary carbohydrate (starch) and protein (gluten) and is utilized in a variety of food products such as bread, biscuits, cakes, pasta, and breakfast cereals. Additionally, wheat is essential for fermentation in the production of beer, alcohol, vodka, and biofuel. Different varieties of wheat, including Triticum vulgare (soft wheat), Triticum durum (hard wheat), and Triticum compactum, are cultivated globally.

GLOBAL SCENARIO OF WHEAT PRODUCTION

Annual global wheat production has ranged from 600-630 million tonnes in recent years, with a sharp increase to 689 million tonnes estimated for 2008-09. Major producers such as the EU-27, China, India, the USA, and Russia collectively account for close to 70% of global production. Wheat is the most traded cereal globally, with trade volumes reaching around 140 million tonnes in 2008-09. Major exporters include the US, EU-27, Canada, Australia, and Argentina, while importing regions such as the Middle East Asia, Southeast Asia, and Northwest Africa demonstrate significant demand.

IMPORTANT WORLD WHEAT MARKETS

Key wheat trading occurs on derivatives exchanges such as the Chicago Mercantile Exchange, Kansas City Board of Trade, Zhenghzhou Commodity Exchange, South African Futures Exchange, MCX, and NCDEX. Physical prices are influenced by US FOB and EU (France) FOB prices.

INDIAN SCENARIO OF WHEAT PRODUCTION

India boasts the largest area under wheat cultivation globally, although it ranks third in production after the EU-27 and China due to lower productivity. Annual production has stabilized around 75-79 million tonnes, accounting for 30-35% of India’s total foodgrain production. The Green Revolution and government initiatives have significantly boosted wheat production over the years, with close to 90% of the cultivated area being irrigated. Major wheat-producing states include Uttar Pradesh, Punjab, Haryana, Rajasthan, and Madhya Pradesh.

Wheat cultivation in India occurs as a rabi crop, with sowing from October to December and harvesting from March to May. Government intervention is prominent in the wheat value chain, with the setting of Minimum Support Prices (MSP) and procurement accounting for 25-30% of annual production. Procured wheat is utilized for maintaining buffer stocks, public distribution systems, and welfare programs. India occasionally resorts to imports during supply shortages, while exports are limited due to current policies.

MARKET INFLUENCING FACTORS

Wheat prices typically rise during cultivation (December to March) due to market scarcity and dip during peak arrival periods (April and May). Weather conditions, particularly in Haryana and Punjab, significantly affect production. Government policies regarding MSP, buffer stocks, PDS sales, and imports/exports play a crucial role in price determination. Despite limited international trade, variations in production and consumption worldwide influence global prices, while regular reports from international agencies like the US Department of Agriculture and the Food and Agricultural Organization provide valuable insights for market participants.