Reduction in wheat procurement eases storage crunch

Written by Sandip Das | New Delhi | Updated: Jun 8 2013, 06:00am hrs
The storage crunch faced by the Food Corporation of India (FCI) and state government- owned agencies due to excess foodgrain stocks has eased to a large extent with a significant reduction in wheat procurement in the current marketing season (2013-14).

According to the latest data, food grain stocks (mostly consisting of rice and wheat) with FCI exceeded 77 million tonne (MT) at the start of the month, out of which wheat stocks were 44.3 MT. The government has rice stocks of more than 34 MT, sufficient to meet demand during the next few months before paddy is harvested later this year.

Earlier, food ministry officials were apprehensive that foodgrain stocks may reach 90 MT by June after a record wheat procurement target of 44 MT was set by the ministry.

Sources told FE that there was apprehension that a large chunk of wheat stocks had to be stored in temporary godowns because of an acute shortage of storage space. Subsequently, the wheat procurement target was revised to 33 MT and, till Friday, FCI and other agencies had purchased only around 25 MT.

FCI, Central Warehousing Corporation (CWC) and state-owned agencies have a total storage capacity of about 61 MT. This includes 18 MT of cover and plinth (CAP) capacities where the grain can be stored for short periods.

As the government needs about 3-4 MT of foodgrain every month for running the Public Distribution System, the current foodgrain stock is enough to cater to any eventualities for the next one year. Even for meeting foodgrain requirements for the food security legislation, we have enough stocks, an

FCI official said.

As reported by FE on Friday, the government would soon take a call on allowing wheat exports from FCI stocks during the next few months. As per the strategic reserves and buffer stock norm, the government should have a foodgrain stock of around 32 MT on July 1.

Official sources said that government agencies had been hiring rented places to store foodgrain for dealing with the huge storage crunch during the last few years. Mainly due to the bumper grain output of the last few years, the government has been keeping more stock than required under its strategic reserves and buffer stock norms.