Wheat procurement likely to fall to 26-28 mt

Arrivals in UP, MP hold the key to meet the revised procurement target

Wheat procurement in the 2013-14 crop marketing year that started on April 1 is expected to culminate at 26-28 million tonnes (mt), a good 10-12 mt less than last year and almost 60 per cent less than the initial estimate of 44 mt.

Officials from the Food Corporation of India (FCI) say arrivals in Madhya Pradesh and Uttar Pradesh in the next 10 days hold the key to meet this estimate as supplies from Punjab and Haryana are virtually over. Punjab, Haryana, Uttar Pradesh and Madhya Pradesh are the major wheat-producing states in the country. Till date, FCI has procured around 24 mt of wheat from farmers, which is almost 17 per cent less than the corresponding period last year. According to officials, the sharp fall in procurement is mainly because of the overall low wheat production, heightened purchases by private traders and increased holding by farmers in anticipation of further rise in prices.

“Wheat procurement in Punjab and Haryana has virtually stopped and the arrival in mandis has trickled down to 8,000-10,000 tonnes, so the only place from where you can get some wheat are Madhya Pradesh and Uttar Pradesh, where, too, the chances are dim as the arrivals are going down at a fast clip,” said an FCI official, after undertaking a mid-month review of procurement operations.

Madhya Pradesh had fixed a target of purchasing nine mt of wheat this year, of which till Wednesday, it has managed to purchase around 5.87 mt. “Assuming that arrivals improve rapidly, which is not very likely, the state can at best procure another 1.4 mt of wheat. Therefore, we feel wheat procurement this year could end at 26-28 mt, with a strong chance of it going further down,” the official added.

The average daily wheat arrival in all mandis across the country last year till mid-May was around 890,000 tonnes, while this year, it has fallen to almost 230,000 tonnes. Meanwhile, such a sharp drop in procurement and slowing arrivals in mandis have already prompted experts and analysts to question the official production data.

According to some officials from multinational trading companies, India’s wheat production in the crop year ended on March 31, 2013 is expected to be 86-87 mt, much less than the third advance estimate of 93.6 mt.  

However, agriculture secretary Ashish Bahuguna told Business Standard that as of now, the department was sticking to its third advance estimate, which had pegged the wheat production in 2012-13 at 93.6 mt. Added a noted agriculture economist: “Our estimate is that production of wheat will be around 88-90 mt.”

State	Arrival	Procurement
Punjab	10.96	10.76
Haryana	5.85	5.84
Uttar Pradesh	1.31	0.56
Madhya Pradesh	7.66	5.87
Rajasthan	1.32	1.04
2013-14 (Total)	27.18	24.1
2012-13 (Total)	31.23	29.29

<sup>Note: The total might not match as all states have not been included. The wheat crop marketing season runs from April to March and wheat produced in one season is marketed in the next season

Source: Food Corporation of India (FCI)</sup>