FCI wheat procurement likely higher than last year's

Procurement by FCI stood at 26.67 million tonnes as on Friday, compared with 25.42 mt during the corresponding period last year

Despite weather vagaries and aggressive buying of wheat by private traders this season, procurement by the Food Corporation of India (FCI) has touched 26.67 million tonnes (as on Friday), as compared to 25.42 mt during the same period last year.

There had been apprehension of lower procurement due to untimely rain in March/April.

Procurement would end in Punjab and Haryana on Saturday and both states have achieved their estimated targets of 11 mt and 6.5 mt, respectively. Punjab has procured 44,000 tonnes above the target, 11.44 mt, said an official.

Madhya Pradesh was expected to procure eight mt as compared to 6.5 mt last year; FCI sources say it might be seven mt, the figure being 6.8 mt till Friday. This is despite the bonus of Rs 150 a quintal offered by the state government over and above the Centre’s minimum support price of Rs 1,400 a qtl.

Uttar Pradesh was expected to contribute three mt to the central pool but has procured only 0.3 mt. Private traders, say sources, were aggresive this year, in the hope of lucrative returns in the export market. However, the gradual strengthening of the rupee against the dollar has dimmed the prospects for exports, say traders.

One said the price of wheat starts spiralling after September; it was close to Rs 1,800 a qtl last year in the open market. Traders might hold stock and earn higher profits in the lean season. Sources in the trade say about 85 per cent of privately purchased wheat is stored in UP and the rest in MP and Rajasthan. Millers across India rely on private supplies of wheat; that supplied under the Open Market Sales Scheme is not sufficient to meet their demand.

The country requires about 2.5 mt of wheat a month for the Public Distribution System. FCI had an opening balance of 17 mt of wheat as on April 1. After a procurement of 27 mt, we might have an opening balance of about 14 mt next year, a comfortable statistic, said an official.