India's Jan 1 food grain stocks 167% more

Serious storage problem ahead as another bumper wheat crop expected

Foodgrains stocks in India’s state-run warehouses has been estimated to be more than double the required quantity, which could pose some serious problem of storage as the country prepares to harvest another bumper wheat crop in 2013-14 season.

The wheat procurement season will start from April 1, 2013, while for rice it has already started from October 1, 2012.

According to the Food Corporation of India (FCI), grain stocks in warehouses were 66.7 million tonnes, almost 167% more than the required quantity of 25 million tonnes as on Jan 1, 2013. 

The inventories will soar as the ongoing rice procurement has been better than last year so far.  According to an official statement, India’s state agencies and Food Corporation of India (FCI) have together procured around 25.09 million tonnes of rice in the 2012-13 procurement season that started from October, almost 6% more than the same period  last year, mainly from Punjab, Haryana, Chhattisgarh and Andhra Pradesh.

However, same is not the case with eastern states, where rice procurement has been slugging because of inadequate procurement mechanism.

The government has sought some information from states on instances of distress sale by farmers to frame its price policy for the next kharif sowing season, which will start from June 2013. The information was sought after reports that farmers are being forced to sell their produce at 10—20% below the MSP in some parts of eastern India because of inadequate procurement facilities.

India annually procures around 35-38 million tonnes of rice for the central pool to distribute it at cheap rates for the Public Distribution System (PDS). In 2012-2013, the government has targeted to procure around 40.1 million tonnes of rice for the central pool, around 15% higher than the actual procurement of 2011-2012.