WHEAT MARKET OF INDIA

Indian Wheat Market

India is the third largest producer of the wheat crop. It has been successfully fulfilling its large domestic consumption demand in the past few years and has been exporting the surpluses to give the major exporters of the world a good competition. India produces an average of 75 million tons wheat each year but the production of this crop is generally fluctuating due to the uncertainty of the rainfall. The state of Uttar Pradesh leads the production in the country. For self-consumption purposes, the farmers retain around 48% of their production and hence it is not entered into the total production figures of the country.

Indian wheat is generally medium hard bread wheat. It is a staple food of this country. That is why almost all of the wheat produced is consumed. India holds the third position in the major wheat consumer’s list after European Union and China consuming around 72 million tons of wheat. The demand-supply flows with in the country are largely interfered by the government of the country so as to make sure that the grain supplies be stable and prices do not get affected.

With the introduction of the new technologies in the agricultural sector, there has been a constant increase in the productivity of wheat produced and hence there has been a growth in the surplus level of the country and consequently a rising trend in the wheat export. World market sees a dependable supplier of wheat in the form of India. The major exporters of the world namely US and Australia have lost their share in the world’s export with the coming of India in the exporting scenario. The export figures of India in 2003-04 were 5 million tons. The major importers of Indian wheat are the southeastern Asian countries and the gulf countries. India was an importer of wheat in the 90s as it the domestic demand was too high but now this situation has been overcame and overturned.

Market influencing factors:

• Weather conditions
• Government policies and regulations
• Prices fluctuations of the competitive and substitute products
• Season of harvesting and peak season
• Technological improvements
• Crop size
• World demand for wheat

Major trading center in India:

• Amritsar (Punjab)
• Moga (Punjab)
• Ludhiana (Punjab)
• Jalandhar (Punjab)
• Bhatinda (Punjab)
• Meerut (Uttar Pradesh)
• Hathras (Uttar Pradesh)
• Saharanpur (Uttar Pradesh)
• Barreily (Uttar Pradesh)

 Indian commodity exchanges :

 National Commodity & Derivatives Exchange ltd

Multi Commodity Exchange of India ltd

National Multi Commodity Exchange of India ltd 

Chamber Of Commerce, Hapur 

SCENARIO OF WORLD WHEAT PRODUCTION

World Wheat production Scenario 

Wheat was one of the first crops that were cultivated in the world thanks to its adaptability to wider range of climatic conditions and soils making it a very easy to produce crop in that time when man didn’t even know the basics of living. Wheat requires a cooler weather and a good level of moisture in the early plantation period and once the grain is formed, it needs a warmer weather to dry up. That is why the best-suited climate needed for the wheat crop to prosper is the temperate climate.

In USA, the wheat seeds are sown in the months of September and October. After February, when the snow in those areas starts to melt, the wheat crop starts to shoot up and during summers it is left to develop and finally it is harvested in the months of June, July and September. In India, wheat is cultivated as a Rabi crop and it is planted in the month of October. It is harvested in the months April and May

The world production of wheat sums up to over 585 million tons annually. As mentioned above, the production of wheat is slightly concentrated in the hands of a few countries as the top four producers of the world contribute around 60% of the world’s total production. The production-wise list of the major producers of wheat is given below

• European Union
• China
• India
• United States of America
• Russia
• Canada
• Australia
• Pakistan
• Turkey
• Argentina
• Iran
• Kazakhstan

The largest producer of wheat in the world is European Union that contributes to around 1/4th share to the world’s total production. As it is said that the demand of wheat increases with the increase in population, the nations having the largest population in the world i.e. China and India stand at the 2nd and 3rd position in the largest wheat producing nations’ list in order to satisfy the domestic consumption demand. These two countries contribute 14 % and 12% respectively in the world’s total production. India has shown a high rise in production of wheat after the green revolution and taken a lead from USA in recent times.

Wheat is produced on approximately 2.5 million square kilometers of the world. The maximum area in the total cultivated area of wheat is constituted by India at around 13%. The other major countries that have a significant impact on the total area contributed for wheat production are

• European Union
• Russia
• China
• USA
• Australia
• Canada
• Kazakhstan

WORLD SCENARIO OF WHEAT

Wheat Production consumption and Import scenario

Wheat is a cereal grain that belongs to the grass family of the genus ‘Triticum’. A dry, one seeded fruit named kernel is obtained from this spiky grass like grain, which is ground to make flour and is consumed throughout the world as one of the most important staple food. It is the second largest cereal grain consumed on earth and that is why it is widely cultivated in more than 30000 varieties.

Wheat is important especially for making breads and other bakery products as it has got the maximum number of glutens as compared to any other grain. This crop is also grown as a forage crop for the livestock. 

Wheat is a very important edible cereal grain crop. As already mentioned, it is the second largest grain crop consumed after rice. The cultivation of wheat has its own advantages like it has a very good yield per unit area, has a relatively short growing duration period and the production of wheat is comparatively easier than the other grain crops as it grows well in the temperate regions. That is why it serves as a very good cash crop and proves its dominance in the world commerce. Gluten, which is a primary constituent in raised bread, is found in wheat and that is why most of the bakery products are made from wheat only.

The world production of wheat figures over 585 million tons annually. The largest producer of wheat in the world is the European Union followed by China, India and United States of America. The total wheat production of the world is slightly concentrated is clear from the fact that these four producers contribute to around 60% of the total production. The consumption of wheat in the world is a huge 580 million tons but is successfully kept satisfied with an equally high production figures. Consumption has been constantly increasing during the last 10 years with the increase in population, and alarmingly, the consumption is prepared to shoot up further and is expected to reach up to 775 million tons in 2020. Wheat is consumed all through the globe and the leading countries in this list are

• European Union
• China
• India
• Russia
• United States of America
• Pakistan

The above list makes it clear that the largest producers of wheat in the world are also the largest consumers of the world, which means, most of the wheat production is consumed at the place of production. The export market of wheat is getting competitive with the new entrants like India into it and the export figures hover around 200 million tons. The major exporting countries of this crop are: -

• United States of America
• Australia
• Canada
• European Union
• Argentina

The imports of wheat are done by the countries, which have a high domestic demand and a fluctuating production level. That is why the countries shuffle in the list of highest wheat importing countries. The world import figures sum up to 100 million tons and are currently done by more than 100 countries. The major countries are

• European Union
• China
• Egypt
• Japan
• Brazil
• Mexico
• Indonesia
• Algeria
• Philippines
• Iraq

WHEAT SCENARIO IN INDIA

Wheat cultivation and production in India

According to the archeological evidences, some species of wheat grew as a wild grass in the Middle East areas of Syria, Israel, Jordan, Turkey and Iraq. With the shortages of food, wheat was domesticated and cultivated 11000 thousand years ago. In fact, it was one the first crops cultivated ever. This was only due to the cultivation of this crop that people came to know how to produce their own food and in turn started to settle than wander around.

In around 6700 BC, Swiss people came to know the use of wheat in flat cakes. Egyptians were the first one to develop the concept of yeast bread and even the workers who were indulged in the construction of pyramids were paid in bread! Wheat now started gaining popularity and the concept of wheat farming spread and reached Ireland, Ethiopia, Spain and India. In 150 BC bakeries were largely set up to produce bread in Rome.

The British took wheat to the new world as the climate and soil of England was not suitable for the wheat production. With time, wheat became so significant as a staple food crop, that now; the demand of wheat is directly proportional to the population level.

Wheat was one of the first crops that were cultivated in the world thanks to its adaptability to wider range of climatic conditions and soils making it a very easy to produce crop in that time when man didn’t even know the basics of living. Wheat requires a cooler weather and a good level of moisture in the early plantation period and once the grain is formed, it needs a warmer weather to dry up. That is why the best-suited climate needed for the wheat crop to prosper is the temperate climate.

In USA, the wheat seeds are sown in the months of September and October. After February, when the snow in those areas starts to melt, the wheat crop starts to shoot up and during summers it is left to develop and finally it is harvested in the months of June, July and September. In India, wheat is cultivated as a Rabi crop and it is planted in the month of October. It is harvested in the months April and May

The following areas in India are the major wheat producing areas in the country and contribute to around 92% of the total production in the country

• Uttar Pradesh
• Haryana
• Punjab
• Rajasthan
• Madhya Pradesh
• Gujarat
• Bihar

India produces around 75 million tons of wheat every year and stands at the third position in the list of the major wheat producers in the world. India also stands at the top in the world in terms of area covered in production of wheat. Uttar Pradesh is the leading producer state in India followed by Punjab and Haryana. Wheat occupies a major share of 35% production in the total production of crops cultivated and 65% of total cropped area in the country. This share in production and area covered of the crop has increased since independence and is also constantly rising. The yield of wheat in kilograms per hectare has also risen significantly from 522 kg/ha in 1950/51 to 1620kg/ha in 1998/99

SEED SECTOR OF INDIA

Government Policy Initiatives in Indian Seed Industry

Seed is the basic and most critical input for sustainable agriculture.  The response of all other inputs depends on quality of seeds to a large extent.  It is estimated that the direct contribution of quality seed alone to the total production is about 15 – 20% depending upon the crop and it can be further raised up to 45% with efficient management of other inputs. The developments in the seed industry in India, particularly in the last 30 years, are very significant. A major re-structuring of the seed industry by Government of India through the National Seed Project Phase-I (1977-78), Phase-II (1978-79) and Phase-III (1990-1991), was carried out, which strengthened the seed infrastructure that was most needed and relevant around those times.  This could be termed as a first turning point in shaping of an organized seed industry. Introduction of New Seed Development Policy (1988 – 1989) was yet another significant mile stone in the Indian Seed Industry, which transformed the very character of the seed industry.  The policy gave access to Indian farmers of the best of seed and planting material available anywhere on the world.  The policy stimulated appreciable investments by private individuals, Indian Corporate and MNCs in the Indian seed sector with strong R&D base for product development in each of the seed companies with more emphasis on high value hybrids of cereals and vegetables and hi-tech products such as Bt. Cotton.  As a result, farmer has a wide product choice and seed industry today is set to work with a ‘farmer centric’ approach and is market driven.  However, there is an urgent need for the State Seed Corporations also to transform themselves in tune with the industry in terms of infrastructure, technologies, approach and the management culture to be able to survive in the competitive market and to enhance their contribution in the national endeavour of increasing food production to attain food & nutritional security.

The following policy initiatives have been taken by the Government of India in seed sector:- 

•   Enactment of the Seeds Act, 1966
•   Seed Review Team-SRT (1968)
•   National Commission on Agriculture’s Seed Group (1972)
•   Launching of the World Bank aided National Seeds Programme (1975-85) in three phases
    leading to the creation of State Seeds Corporations, State Seed Certification Agencies,
    State Seed Testing Laboratories, Breeder Seed Programmes etc
•   Seed Control Order (1983)
•   Creation of the Technology Mission on Oilseeds & Pulses (TMOP)  in 1986 now called The
    Integrated Scheme of Oilseeds, Pulses, Oil Palm and Maize (ISOPOM).
•   Production and Distribution Subsidy
•   Distribution of Seed Mini-kits
•   Seed Transport Subsidy Scheme (1987)
•   New Policy on Seed Development (1988)
•   Seed Bank Scheme (2000)
•   National Seeds Policy (2002)
•   The Seeds Bill (2004)
•   Formulation of National Seed Plan (2005)
•   National Food Security Mission (2007)
•   Rashtriya Krishi Vikas Yojna (2007)

                     National Seeds Policy, 2002: Thrust Areas

     –       variety development
–       plant variety protection
–       seed production
–       quality assurance
–       seed distribution and marketing
–       infrastructure facilities
–       transgenic plant varieties
–       import of seeds and planting materials
–       seed exports
–       promotion of domestic private sector seed industry
–       strengthening of the  monitoring syste

Seeds Bill, 2004: Salient Features 

•    Registration of kinds and varieties of Seeds etc.
     –  Evaluation of performance
     –  Compensation to Framers
     –  Registration of Seed Producers and Processing Units
     –  Seed dealers to be Registered

•    Regulation of Sale of Seed and Seed Certification
•    Seed Analysis and Seed Testing
•    Export and Import of Seeds and Planting Material
•    Offences and Punishment.

SEED PRODUCTION SYSTEM IN INDIA

Seed Production System In India 

               The Indian seed programme largely adheres to the limited generations’ system for seed multiplication in a phased manner.  The system recognizes three generations namely breeder, foundation and certified seeds and provides adequate safeguards for quality assurance in the seed multiplication chain to maintain the purity of the variety as it flows from the breeder to the farmer.

 Breeder Seed

               Breeder seed is the progeny of nucleus seed of a variety and is produced by the originating breeder or by a sponsored breeder.  Breeder seed production is the mandate of the Indian Council of Agricultural Research (ICAR) and is being undertaken with the help of;

 i)          ICAR Research Institutions, National Research Centres and All India Coordinated Research Project of different crops;

ii)         State Agricultural Universities (SAUs) with 14 centres established in different States;

iii)         Sponsored breeders recognized by selected State Seed Corporations, and

iv)        Non-Governmental Organizations.

               ICAR also promotes sponsored breeder seed production programme through the National Seeds Corporation (NSC) / State Farms Corporation of India (SFCI), State Seeds Corporation (SSCs), Krishi Vigyan Kendras (KVKs) etc.

                There has been a steady increase in the production of breeder seed over the years.

               The indents from various seeds producing agencies are collected by the State Departments of Agriculture and submitted to the Department of Agriculture and Cooperation (DAC), Ministry of Agriculture, Government of India, which is turn compiles the whole information crop wise and sends it to the Project Coordinator/Project Director of the respective crops in ICAR for final allocation of production responsibility to different SAUs/ICAR institutions.  The allocation of responsibility for production of breeder seed is discussed in the workshop in respect of the particular crop and is made to various centres as per the facilities and capabilities available at the centres and the availability of nucleus seed of a particular variety.  It may be noted that indents are compiled and forwarded to ICAR at least 18 months in advance. To make the programme systematic, and for proper evaluation of the breeder seed production programme, monitoring terms have been constituted and reporting proformae have been devised.  The monitoring terms consist of breeder of the variety, the concerned Project Director or his nominee, representative ofNSC.  The production of breeder seed is reviewed every year by ICAR-DAC in the annual seed review meeting. 

               The actual production of breeder seed by different centres is intimated to DAC by ICAR.  On receipt of information from ICAR, the available breeder seed is allocated to all the indenters in an equitable manner.  In the case of varieties which are relevant only to a particular State, the indents for breeder seed are placed by the concerned Director of Agriculture with the SAUs/ICAR institutions located in the State.  The breeder seed produced is lifted directly by the Director of Agriculture or foundation seed producing agencies authorized by him.

 Foundation Seed

              Foundation seed is the progeny of breeder seed and is required to be produced from breeder seed or from foundation seed which can be clearly traced to breeder seed.  The responsibility for production of foundation seed has been entrusted to the NSC, SFCI, State Seeds Corporation, State Departments of Agriculture and private seed producers, who have the necessary infrastructure facilities.  Foundation seed is required to meet the standards of seed certification prescribed in the Indian Minimum Seeds Certification Standards, both at the field and laboratory testing.

 Certified Seed

               Certified seed is the progeny of foundation seed and must meet the standards of seed certification prescribed in the Indian Minimum Seeds Certification Standards, 1988.  In case of self pollinated crops, certified seeds can also be produced from certified seeds provided it does not go beyond three generations from foundation seed stage-I.

              The production and distribution of quality/certified seeds is primarily the responsibility of the State Governments.  Certified seed production is organized through State Seed Corporation, Departmental Agricultural Farms, Cooperatives etc. The distribution of seeds is undertaken through a number of channels i.e. departmental outlets at block and village level, cooperatives, outlets of seed corporations, private dealers etc.  The efforts of the State Governments are being supplemented by NSC and SFCI which produce varieties of national importance.  NSC markets its seeds through its own marketing network and also through its dealer network.  SFCI markets its seeds mainly through the State Departments of Agriculture and the State Seed Corporations.  The production of certified seed by NSC and State Seed Corporations is mainly organized through contract growing arrangements with progressive farmers. SFCI undertakes seed production on its own farms.  The private sector has also started to play an important role in the supply of quality seeds of vegetables and crops like hybrid maize, sorghum, Bajra, cotton, castor, sunflower, paddy etc.

                 The requirement of certified/quality seeds is assessed by State Governments on the basis of the area sown under different crop varieties, area covered by hybrid and self-pollinated varieties as well as the seed replacement rate achieved.  The availability of seed is ascertained by the State Departments of Agriculture on the basis of the production of seed in government farms and production of seeds by State Seeds Corporations and other agencies.  The Government of India periodically assesses the requirement and availability of seeds through detailed interaction with State Governments and seed producing agencies in the bi-annual Zonal Seed Review Meetings and the National Kharif and Rabi Conferences.  The Department of Agriculture and Cooperation facilitates tie-up arrangements with seed producing agencies to ensure that the requirement of seeds is met to the maximum extent possible.

               Information on Production and availability of Breeder, Foundation and Certified seeds can be accessed from this portal.

   

Production / Availability Of Certified/Quality Seed
Qty. In Million  Tonnes
	X Plan period					XI Plan
CROP	2002-03	2003-04	2004-05	2005-06	2006-07	2007-08	2008-09
WHEAT	0.3150	0.3653	0.4783	0.4001	0.4568	0.6700	0.8768
PADDY	0.2921	0.3228	0.3156	0.367	0.4035	0.5354	0.6654
MAIZE	0.0455	0.1025	0.0815	0.0886	0.0808	0.0553	0.0740
JOWAR	0.0366	0.039	0.0352	0.0411	0.0348	0.0278	0.0274
BAJRA	0.0263	0.0347	0.0284	0.0349	0.0243	0.0244	0.0261
RAGI	0.0025	0.0027	0.0027	0.0026	0.0028	0.003	0.0036
BARLEY	0.0052	0.0062	0.0071	0.0054	0.0072	0.0241	0.0231
CEREAL TOTAL	0.7232	0.8732	0.9488	0.9397	1.0101	1.3400	1.6964
GRAM	0.0245	0.0258	0.0327	0.0296	0.057	0.0608	0.0835
LENTIL	0.0031	0.0043	0.0047	0.0041	0.0026	0.0063	0.0059
PEAS	0.0036	0.0062	0.0065	0.0034	0.0044	0.0115	0.0130
URD	0.0134	0.0165	0.0138	0.0207	0.0146	0.0179	0.0314
MOONG	0.0096	0.0094	0.0114	0.019	0.0163	0.0169	0.0248
ARHAR	0.0086	0.0086	0.0085	0.0099	0.0119	0.0167	0.0175
COWPEA	0.0012	0.0009	0.001	0.0011	0.0013	0.0017	0.0024
MOTH	0.0003	0.0002	0.0004	0.0006	0.0006	0.0006	0.0020
OTHERS	0.0003	0.0002	0.0002	0.0003	0.0013	0.0018	0.0026
PULSES TOTAL	0.0646	0.721	0.0792	0.0887	0.1101	0.1341	0.1830
GROUNDNUT	0.0730	0.101	0.0682	0.1119	0.1114	0.1762	0.3187
RAPE/MUST.	0.0105	0.0108	0.0164	0.016	0.0197	0.0196	0.0207
TIL	0.0022	0.0017	0.0018	0.0023	0.0021	0.002	0.0028
SUNFLOWER	0.0107	0.0118	0.0103	0.0133	0.0102	0.0111	0.0059
SOYABEAN	0.0662	0.0952	0.1181	0.1478	0.1348	0.1691	0.1801
LINSEED	0.0001	0.0002	0.0001	0.0001	0.0002	0.0003	0.0003
CASTOR	0.0044	0.0051	0.0045	0.0056	0.0063	0.0056	0.0056
SAFFLOWER	0.0010	0.0012	0.001	0.0013	0.0008	0.0009	0.0007
NIGER/others		0	0.0003	0	0.0006	0.0002	0.0001
OILSEEDS TOTAL	0.1681	0.227	0.2207	0.2983	0.2861	0.3851	0.5350
COTTON	0.0367	0.0307	0.0301	0.0288	0.0256	0.0261	0.0272
JUTE	0.002	0.0022	0.002	0.0052	0.0037	0.008	0.0042
MESTA/OTHER	0.005	0.0001	0.0001	0.0002	0.0006	0.0018	0.0047
FIBRE TOTAL	0.0437	0.033	0.0322	0.0342	0.0299	0.0358	0.0361
POTATO	0.038	0.037	0.0397	0.0417	0.0415	0.0435	0.0430
OTHERS	0.002	0.0015	0.0021	0.0025	0.0041	0.0047	0.0100
GRAND TOTAL	1.0396	1.2438	1.3227	1.4051	1.4818	1.9431	2.5035

( Source : compiled by Seeds Division of DAC)