Wheat procurement from farmers to be raised

The government plans to increase purchases from farmers to build stockpiles and lower imports.

The government may buy as much as 15 million tonnes, up 35 per cent from a year earlier, said T Nanda Kumar, federal food secretary, in an interview in Dubai on Tuesday.

Higher purchases would reduce the need to buy wheat overseas at prices that have almost doubled in the past year, reaching a record $10.095 a bushel on December 17.

It may also take pressure off global supplies, which the US government forecasts will drop to 110.9 million tonnes by May 31, the lowest in three decades.

"If we procure this much, we may be comfortable,'' he said.

India's wheat production may match last year's 74.9 million tonnes in the March-April harvest because of favourable weather and increased planting in Punjab and Haryana, the biggest producing states, Nanda Kumar said.

The government may still import wheat to boost its reserves, Nanda Kumar said.

India has since July imported 1.64 million tonnes to build stockpiles. Purchases in the year ending June may drop to 2 million tonnes, less than a third of the previous year, US Department of Agriculture said in report on January 11.

"We may not need to but importing is an option that will be kept open,'' he said.

The government needs 1 million tonnes a month to distribute to the poor. Stockpiles at state warehouses may total 5 million tonnes by April 1, more than the 4 million tonnes needed for emergencies, because of recent imports, Nanda Kumar said.

Wheat for March delivery gained as much as 1.1 per cent to $9.84 a bushel in after-hours electronic trading on the Chicago Board of Trade. It traded at $9.77 at 4 pm Singapore time.