Wheat procurement likely to decline 8% in 2013-14

FCI expected to purchase 35 mt, against last year's 38 mt as yield in Punjab, Haryana to dip 10-15%

India will purchase fewer quantities of wheat in the 2013-14 crop marketing year for its central stocks, due to brisk buying by private traders in Madhya Pradesh and Uttar Pradesh and a drop in yields in Punjab and Haryana, said a senior official.

“By our estimate, wheat procurement this year could be somewhere around 35 million tonnes because yields in Haryana and Punjab, the two biggest wheat producing states, are almost 10-15 per cent less than 2012,” a senior official of the Food Corporation of India (FCI) told Business Standard. Punjab, Haryana, Uttar Pradesh and Madhya Pradesh account for 90 per cent of the total wheat produced in India every year.

Last month, Food Minister K V Thomas had told Business Standard that wheat procurement in 2013-14 could be around 40 million tonnes, less than the original target of 44.12 million tonnes, because of strong demand from private traders.

According to a PTI report today, procurement could be around 33 million tonnes, of which Punjab will contribute 11 million tonnes and Madhya Pradesh nine million tonnes.

“Between last month and now, the situation has further changed and indications of strong revival in arrival has gradually diminished,” said the FCI official.

In the 2012-13 crop marketing year, which ended on March 31, the government had purchased a record 38.1 million tonnes from farmers. “A clear picture will emerge only around May 15 but the trend indicates that procurement from Punjab and Haryana won’t be huge,” the official added.

Massive procurement in the previous years has stretched the already precarious foodgrain storage scenario. According to FCI data, foodgrain stock in the central pool as on April 1 was around 60 million tonnes, three times the required quantity.

Of this, wheat stocks are estimated to be around 24.2 million tonnes, compared to a requirement of seven million tonnes, while rice stocks are estimated to be around 35.4 million tonnes, against a requirement of 14.2 million tonnes.

The FCI data shows the government has so far procured 20 million tonnes of wheat at the minimum support price of Rs 1,350 a quintal. Officials said although the procurement is expected to be lower than last year, the quantity is sufficient to maintain the government’s buffer stock and fulfil the demand of the Public Distribution System and other welfare schemes.

SHRINKING MOUNTAIN

• Govt now expects to purchase 40 million tonnes of wheat as against the earlier target of 44.1 million tonnes
• Wheat procurement drops due to poor yield in Punjab, Haryana and brisk purchases by private traders
• Final picture on wheat purchase to be clear by mid-May
• No impact seen on PDS operations as government has ample stocks
• Govt purchased a record 38.1 million tonnes of wheat in 2012-13
• Low procurement may help government save Rs 3,000 crore