After wheat fiasco, FCI cuts rice target

The ministry of food and public distribution has pegged the estimates for summer season rice procurement at 34.5 million tonnes (mt), marginally higher from a year ago. It has taken lessons from wheat, for which the procurement target was fixed very high on higher output but later the procurement fell 40 per cent short.

This is despite the 92.3-mt rice crop forecast by the government in the first advance estimates. The first advance estimates, by earlier trends, are conservative.

The Rice Research Institute has projected a crop of 107 mt and the US Department of Agriculture 108 mt in 2013-14. However, the government expects that private demand could be higher, as in the case of wheat. Hence, the procurement target is near last year's level.

With the arrival of early-sowing varieties in some states, the procurement is set to start from October.

The increase in the yield in Assam, West Bengal and Jharkhand, under the green revolution programme for the east, might raise the production but will not affect procurement.

A senior official in the Food Corporation of India confirmed the increase in output but added the increase in productivity would come from the rice-consuming states, so there will be no major variation in procurement.

The higher productivity in the east might trigger the active participation of rice millers, he added.

There is a strong correlation between minimum support price of the commodities and procurement. A modest revision of Rs 60 a quintal in 2013-14 (to Rs 1,310) from a year ago does not leave much room for higher procurement.

The private traders are also likely to be aggressive this year due to a strong dollar and bright prospects for exports, said an official. But the situation might be clearer in a week to 10 days, when arrivals pick up pace, he added.