India: Government misses wheat procurement target for second consecutive year, procures 26.6 mt — 28.7% lower than target
The Centre missed its wheat procurement target for the second consecutive year for India’s main rabi or winter crop for the 2024-25 season at 26.6 million tonnes (mt) 28.7% — lower than its 37.3mt target.
Wheat stocks with the government’s procuring agency — Food Corporation of India (FCI) — are already at a 16-year low of 30.3 mt, a little over the buffer norm of 27.5 mt as of 1 July. Official data shows that the previous lowest wheat stock in Central pool was at 24.12 mt on 1 June 2008.
“Procurement of wheat is largely over, and we can consider 26.5 mt as the final procurement; it could be a little over that as 100-500 tonnes are coming from Punjab and its neighborhood. So, the final figure is 26.5 mt,” an official from FCI said.
The low procurement — similar to last year — is mainly on account of lower purchases in Madhya Pradesh, one of India’s major producers, and farmers preferring to sell to private traders rather than the government because of better prices.
Desi wheat prices in key wholesale markets of Madhya Pradesh are quoted at ₹2,450–2,600 per quintal, depending on quality, against the government’s minimum support price of ₹2,275 a quintal, according to spot traders.
Overall, the Centre could procure only 4.8mt of wheat from Madhya Pradesh against a target of 8mt, and 7.1mt purchased last season.
Purchase from Punjab was 12.4 compared to the target of 13mt and the previous year’s purchase of 12.1mt, from Haryana 7.1mt against 8mt target and 6.3mt bought last year, and from Uttar Pradesh a mere 930,483 tonnes against a target of 6mt and last year’s procured quantity of 219,373 tonnes, as per the latest data from FCI.
“The government fixes an estimated target for procurement taking the maximum figure into consideration, so that funds are arranged prior hand and payment could be made to farmers at the earliest,” a senior official said earlier.
Despite depleting stocks of wheat, the Centre is not worried as 26.6 mt will be sufficient for its public distribution system (PDS) and market interventions requirements, Chopra said.
“Taking the worst-case scenario, wheat procurement could be 26 mt, which we did last year. This would be sufficient to meet the NFSA (National Food Security Act) requirement of 18-20 mt and market interventions of 14 mt. We had an opening balance of 8 mt,” Chopra said earlier.
On Thursday, in a statement, the Department of Food and Public Distribution said it has no plans to alter the import duty on wheat for now as India has sufficient stocks to meet domestic requirements and undertake market interventions, if required, to keep prices stable.
It further said that the government is closely monitoring the market price of wheat.
Official retail price of wheat on Sunday was unavailable as the consumer affairs ministry website was not accessible at the press time.
Food inflation, which accounts for nearly 40% of the overall consumer price basket, has remained unchanged. It was 8.69% in May and 8.70% in April. By comparison, it was 3% a year ago.
However, retail inflation in wheat rose to 6.5% in May from 6% a month ago and 12.6% a year ago.
Queries sent to the FCI and the food and public distribution department remained unanswered at press time.
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