To Check If There Is Feasibility of Arbitrage Advantages for Wheat in Khanna and Tarapur Market

AGRIBUSINESS ASSIGNMENT

By: Gaurav Jaiswal (P36029)

To check if there is feasibility of Arbitrage Advantages for wheat in Khanna and Tarapur market 

        As we can see from the above table, In the month of April 2016, price of wheat in the Khanna Mandi, which is in the Ludhiana-Panjab is remain constant around 1525 Rs./quintal. While in the Tarapur Mandi of Gujarat the average price is fluctuating from 1660 to 1730 during the month of April. So the rate of the wheat is depends on the day on which we purchased the wheat from the Tarapur Mandi. If we calculate the average rate during the month it comes out to be 1688 Rs. /quintal that is 163 Rs./quintal higher than the Khanna Mandi.
         If we transport wheat from Panjab to Gujarat then truck freight is around 364 Rs./ quintal (V.R.L. Transport, Globe cargo Transport) and via train it is 173 Rs./Quintal this rate will raise further with calculation of  labor cost for loading and unloading. Since the rate of transportation is higher than the average of arbitrage available we don’t get any advantage by buying from the Khanna Mandi and sell it to Tarapur Mandi.

About Global G.A.P         

         GLOBALG.A.P. is the internationally recognized standard for farm production which aims at safe and sustainable agricultural production to benefit farmers, retailers and consumers throughout the world. GLOBALG.A.P. Certification covers Food safety and traceability, Environment (including biodiversity), Workers’ health, safety and welfare, Animal welfare, Includes Integrated Crop Management (ICM), Integrated Pest Control (IPC), Quality Management System (QMS), and Hazard Analysis and Critical Control Points (HACCP). It also requires a general approach to farming that builds in best practices for generations to come.