Central Government hikes MSP
With the Rabi-planting season picking up pace, the central government on Tuesday hiked the minimum support price (MSP) for six mandated crops, raising the price for whole wheat by 5.5%. The new MSP for wheat will be Rs 2,125 per quintal against Rs 2,015 per quintal earlier. Similarly, MSP for lentil, mustard & barley has increased 6-9%.
Though current wheat prices are trading above MSP prices, higher than usual increase in MSPs would result in higher income for farmers even in case market price softens after the arrival of new crop. We believe this would boost rural income levels and, in turn, positively impact rural consumption. FMCG industry, which has seen dismal volumes in last one year, is expected to see a revival in volumes from Q3FY23 onwards.