Wheat procurement might be four to five million tonnes (mt) less for the central pool over last year.In absolute terms, this would be a four-year low.
All India procurement was 28.08 mt in 2015-16. The initial estimate of wheat purchase by government agencies for 2016-17 was 30 mt, later revised to 28 mt in the backdrop of drought in much of the country. Total procurement of 21.5 mt was registered till Thursday; it was 20.9 mt in the corresponding period last year. And, arrivals have slowed in most grain markets.
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According to reports, farmers in Rajasthan, Madhya Pradesh and Uttar Pradesh have this year preferred selling to private buyers due to instant cash payment, as compared to delayed payments by state.
Farmers get a premium of up to Rs 150 a quintal for the normal variety of wheat in Madhya Pradesh, where the dip in government procurement has been the highest. Last year, MP had surpassed Haryana to reach second place (after Punjab), with 7.3 million tonnes of wheat buying. This year against the projection of 6.8 mt, procurement is likely to close at four mt.
An import duty of 25 per cent has made Australian wheat unviable for flour millers in the south. “Madhya Pradesh wheat would cost us Rs 1,850-1,900 a quintal and Australian wheat is available for Rs 1,950-2,000 a quintal. So, an upswing in demand for MP wheat this year is observed,” said a miller.
About 22 mt a year of wheat is needed for the Public Distribution System. FCI had an opening stock of 14 mt on April 1. So, a fall of four mt can be absorbed, said the FCI executive.
R K Gupta, acting head of the Directorate of Wheat Research, Karnal, told this newspaper, “The wheat crop is looking good and almost 80 per cent has been harvested. The government has estimated production to be around 93.5 mt and we fully agree with that. The rains which happened twice during March has turned out to be beneficial for the crop. In 2015, total production was around 86.5 mt, down from 96.5 mt a year before, and I'am very sure that output would be better than 2015 this year, though it might not be as big as 2014. By our reports, production in Punjab, Haryana and MP is expected to be better than last year. In Haryana and Punjab,it is expected to be 10-15 per cent more than last year.”