Wheat procurement for 2024-25 sees slight dip, but likely to pick up soon

Wheat procurement for the 2024-25 marketing year has started on a positive note though total procurement till April 25 is still 17 per cent less than the same period last year.

The drop in the purchases so far is largely due to late harvesting in some major growing states and also because of the ongoing elections in north India.

Officials are hopeful that procurement will pick up pace once the dust settles on the different factors that impact the purchases.

Also, the subdued start to purchase season has raised some questions on the total harvest in some major growing states such as Madhya Pradesh, though officials believe that on an All India basis wheat production in 2024-25 is expected to be over 112 million as per the second advance estimate.

The drop in procurement could also be on account of farmers holding on to their produce in anticipation of higher rates later during the year or increased buying by private players who are looking to replenish their inventories.

In some states like UP, there is an unofficial diktat for the private players not to aggressively purchase till the time government purchases continue.

This has resulted in a 397 per cent jump in purchases till April 25 this year as compared to the same period last year.

India has targeted to procure around 37 million tonnes of wheat this year while last year the actual procurement was over 26 million tonnes.

A healthy procurement of wheat is essential to ensure adequate supplies for the Centre’s free food grains distribution scheme called the Pradhan Mantri Gareeb Kalyan Ann Yojana (PMGKAY) and also keep domestic prices under check.

The purchases will also help to replenish its reserves which have fallen to multi-year lows as on April 1, 2024.

States	2024	2023	% Change
Punjab	5764842	8359779	-31.0
Haryana	5477289	5262527	4.1
UP	470009	94633	396.7
MP	3221552	4620499	-30.3
Total	15234494	18376977	-17.1

Source: FCI and agencies

NOTE: Total might not match as all states have not been included
*Wheat procurement usually starts from April 1 but this year it started around Mar 15 in some states. The purchases will continue till June 30 in most states
Also, the FCI has estimated to procure 37.2 million tonnes of wheat this year as against an actual procurement of 26.19 last year