Govts grain stock to cross 70 mt in June, but still lower than last year

Written by Sandip Das | New Delhi | Updated: May 27 2014, 10:45am hrs
The grain stocks with government agencies, including the Food Corporation of India (FCI) and state bodies, is set to cross 70 million tonne at the start of next month. Usually, the stocks would be at the highest level during this time of the year.

This year's stocks would, however, be lower than 77 million tonne reported in June 2013.

Sources told FE that the grain stocks in the middle of this month was reported at 62.2 million tonne, consisting of 41.8 million tonne of wheat and 20.3 million tonne of rice. Besides about 8 million tonne of unprocessed rice is with millers or agencies.

However, the grain stocks would be double than strategic reserve and buffer stocks norms. As per July 1 buffer stocks and strategic reserve norms, the government agencies should have grain stocks of close to 32 million tonne.

Meanwhile, a food ministry official said despite high stock, the grain stored under temporary storage facility like covered and plinth (CAP) have declined to only about 5.5 lakh tonne from 1.5 million tonne stored in CAP a year back. Foodgrain can't be stored for more than six months under CAP.

Due to the creation of additional storage facilities through Private Entrepreneur Guarantee (PEG) scheme, FCI at present has covered storage facilities to the tune of close to 38 million tonne against only 35 million tonne available a year back, an official said.

Out of the total grain stocks at present, close to 32 million tonne of grain is with the FCI while the state agencies, including Pungrain (Punjab), Hafed (Haryana), MP Civil Supplies Corporation, are holding stocks of more than 30.3 million tonne.

A decline of around 7 million tonne of stocks from the previous year has been achieved mainly due to lower rice procurement in the current year and the government selling around 6 million tonne of wheat to private traders under the Open Market Sale Scheme (OMSS), a food ministry official said.

However, the food ministry official said that the government needs to sell a chunk of the excess stock in the open market for putting a curb on rising inflation graph.

Due to the open-ended procurement policy for rice and wheat adopted by the government, the agencies have been buying large chunk of grains from farmers in the key mandis, which led to the average grain stocks hovering around 50 60 million tonne in the last couple of years.

The government-owned agencies buy grain from farmers for distribution under the targeted public distribution system.

Around 3 to 4 million tonne of rice and wheat are distributed monthly to states under TPDS. The corporation also keeps grain for distribution to the armed forces.