Wheat procurement at new high of 20.7 tonne

Food Corporation of India (FCI)-the government's grain procurement and distribution agency expects procurement to touch 22 million tonne. This would be almost double the quantity of 11.1 million tonne purchased last year. 

Aided by a record wheat output of 76.78 million tonne and stable open market prices, FCI has more than doubled its last year's corresponding purchase of 9.97 million tonne.   

 

"Procurement now seems set to touch 21.5 million tonnes and it might even climb up to 22 million tonne. More wheat is expected to come from Uttar Pradesh, Bihar, Madhya Pradesh and Punjab. Arrangement of gunny bags and transportation has been done", said Alok Sinha, chairman and managing director, FCI.     

The largest contribution in wheat purchase has come from Punjab, which contributed about 9.84 million tonnes, followed by Haryana at 5.2 million tonne.

Other major contributing states are UP (2.29 million tonne), MP (1.87 million tonne), Rajasthan (over 872,000 tonne) and Gujarat (over 341,000 tonne).

With this huge 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 two consecutive 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 market experts.

Stable prices in the market over the last one year along with apprehensions of coercive government actions on stockholding has kept private trade largely away from the grain mandis this rabi season. This is evident from the fact that FCI along with other agencies has procured 92 per cent of the total mandi arrivals so far this year as against 73 per cent during the corresponding period last year. 

Even wheat prices have cooled down to Rs 1,070-1,080 a quintal, down about 5 per cent since April owing to increasing arrivals. Perturbed over the rising inflation, the government can now relax as far as wheat is concerned. 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 tonne.

The union department of consumer affairs has extended the validity of the notification enabling state government to impose stock limit on wheat till August 2008.