Govt buys 0.7 MT of new season paddy

Written by Commodities Bureau | Agencies | New Delhi, Oct 3 | Updated: Oct 4 2008, 07:20am hrs
Aided by strong arrival of early maturing varieties of paddy, Indias state-run agencies have purchased around 700,000 metric tonne of paddy from farmers from the new crop. The usual rice procurement season starts on October 1, but in 2008, the government advanced it to September 22 in Haryana due to a request from the state government, while in Punjab it started on September 29.

According to official sources, the procurement will pick up further pace after the Dusshera festivities in eastern and northern India. We have again targeted to procure around 27 million tonne (MT) to 28 million tonne of rice this year, which should be another record, a senior government official said. The paddy is being procured at a minimum support price (MSP) of Rs 800 to Rs 850 per quintal.

Rising stocks of rice and wheat could also mean an early resumption of non-basmati rice exports, which were halted in early April to shore up domestic supplies when rice stocks in many countries had fallen and benchmark prices in Thailand had soared.

Meanwhile, some analysts said that early procurement was the first tangible sign of a good crop-size and could encourage the government to loosen trade curbs. India recently allowed exports of Pusa-1121, a premium non-basmati variety. Benchmark prices in Thailand on Wednesday fell 1.4% to $710 per tonne from $720 last week as demand waned, traders in Bangkok said, well below the record of $1,080 per tonne marked in April.

India, the worlds second-biggest grower of the staple, in September forecast that the summer-sown rice output would touch a record 83.25 million tonne against 82.81 million tonnes a year earlier. The summer-sown crop makes up the bulk of the countrys total rice output of more than 95 million tonne.

Meanwhile, the Food Corporation of India (FCI) has procured a record 28.4 million tonne of rice in the

2007-08 crop year (October-September), which is expected to help stabilise prices in the open market. In 2007-08, we procured 284.44 lakh tonne of rice against a target of 27.6 million tonne, FCI chairman and managing director Alok Sinha said. The procurement during the year, which ended on September 30, is an all-time high.

With a wheat procurement of 22.68 million tonne, the total procurement of foodgrains in 2008 stands at 51.12 million tonne. FCI officials said that the surplus grain stock would help in stabilising prices in the open market, as it was ready to allocate more quantities of grain under the open market scheme.