Govt wheat purchases hit four-year high

2001-0220.6 2002-0319 2003-0415.8 2004-0516.8 2005-0614.79 2006-079.2 2007-0811.1 2008-09

* 11.4

Figures in million tonnes
*Procurement still in progress
Source: Food Corporation of India  As on date, government agencies have procured 14.85 million tonnes of wheat, an increase of more than 85 per cent from the corresponding period last year.  The largest contribution has come from Punjab with about 8 million tonnes followed by Haryana at 4.54 million tonnes. Other major contributing states are Madhya Pradesh (897,390 tonnes), Uttar Pradesh (746,596 tonnes), Rajasthan (526,504 tonnes) and Gujarat (104,138 tonnes).  With this procurement and an opening stock of 5.8 million tonnes as on April 1, the government may not need to import wheat this year to meet the requirement for its public distribution system. The country has been importing wheat for the last two years.  "A better grain procurement by government shall ensure stable prices in the open market and ease the pressure on inflation. With a surplus stock, the government can intervene in the open market whenever there is a significant price increase," said a market expert.  Stable prices and apprehensions of coercive government action on stockholding have kept private traders largely away from grain mandis this rabi season.  This is evident from the fact that FCI, along with other agencies, has procured almost 93 per cent of the total mandi arrivals so far this year as against 77 per cent during the corresponding period last year.  Owing to increasing arrivals, wheat prices have cooled down to Rs 1,070-1,080 a quintal, down about 5 per cent in the last one month. The government can now relax as far as wheat is concerned in the back drop of the rising inflation rate.  The commodity has a weight of 1.38 per cent in the wholesale price index (WPI).  The government has taken a host of measures to ensure adequate wheat procurement. Apart from raising the procurement price from Rs 850 to Rs 1,000 a quintal, it has banned export, imposed compulsory declaration for private purchases exceeding 10,000 tonnes.  The Department of Consumer Affairs has extended the validity of the notification enabling state governments to impose stock limits on wheat till August 2008.