Govt to reconsider wheat exports from FCI stocks

Written by Sandip Das | New Delhi, | Updated: May 10 2013, 06:44am hrs
Decline in supply induces govt to rethink allowing excess foodgrain exports

Following a sharp drop in the quantity of daily wheat arrival at mandis across Punjab, Haryana and Madhya Pradesh because of lower production and increase in private purchase, the government is likely to reconsider its decision to allow exports of excess foodgrains from Food Corporation of India (FCI) stocks through private traders.

Official sources told FE that the expected curb on exports would be to ensure that sufficient quantity of wheat is available for the existing Public Distribution System and likely rise in demand for food grain, following enactment of the National Food Security Act by the government.

Recently, the government revised the current year (2013-14) wheat procurement target from 44 million tonnes (mt) to 33 mt, as farmers bringing in their produce to mandis in key growing states have declined during the last one week. The daily wheat arrival in various mandis on Wednesday has dropped to only 2.2 lakh tonnes from close to 6 lakh tonnes reported on the same day last year.

However at the start of the month, FCI had a wheat stock of 42.7 mt, which is sufficient to meet the requirement for PDS and maintenance of buffer stocks. During the last year, state-owned trading agencies such as PEC and STC have exported 3.6 mt of wheat from the FCI reserve.

Recently, the Cabinet had decided to allow export of

5 mt of wheat from the FCIs 2011-12 stocks through private traders. The government had allowed exports of wheat from FCI stocks to create storage space for the crop, which is currently being procured from farmers in the key growing states Punjab, Haryana, Rajasthan and Madhya Pradesh.

Now that we have not got any bid for the exports because of higher base price, the food ministry would decide on continuing with wheat exports as procurement in the current season may fall below the expected line, an FCI official said.

A food ministry official said that the procurement this season many fall below 33 mt if the current trend is any indication. Till Thursday, the government had purchased more than 23 mt of wheat, as the number of farmers bringing their produce to close to 3,000 mandis across the country has been declining steadily.

Against a target of a record 14 mt of wheat, Punjab is expected to contribute around 11 mt this year because of anticipated decline in output. Similarly, Haryana is expected to contribute only about 7 mt of wheat to the central procurement drive against 8.6 mt achieved last year. So far, the two states have contributed 10.5 mt and 5.7 mt of wheat respectively to the central pool.

Recently, Madhya Pradesh revised its wheat procurement target to 9 mt from 13 mt. The state civil supplies corporation has lifted more than 5.5 mt of wheat from the farmers.