Wheat procurement set to miss even reduced target

Written by Sandip Das | New Delhi | Updated: Jun 1 2013, 05:47am hrs
Thanks to a rise in private purchases by flour millers, lower production and farmers holding on to some stocks in anticipation of better prices, wheat procurement by the government in the current year (2013-14) is set to fall below 26 million tonne (mt), down from last years 38 mt and even short of the lowered target of 33 mt.

With operations by Food Corporation of India (FCI) and state government- owned agencies in Punjab and Haryana largely completed, the government had lifted close to 25 mt of food grain till Friday.

We are expecting to procure 25.5-26 mt by the end of the drive, which would officially be over during the next few days, an FCI official told FE.

However, this sharp fall of 46% from last year's level is not expected to impact the foodgrain requirement for the Public Distribution System, thanks to sufficient buffer stocks. FCI started the wheat procurement drive for the current year from April 1, with carry forward stocks of more than 22 mt.

Earlier this month, the food ministry cut its wheat procurement target for the season to 33 mt. The target is expected to be revised downward again.

However, the 3,000 mandis across key growing states have seen wheat arrivals of more than 28 mt till Friday, which indicates rising private purchases this year. Daily purchases of wheat by FCI have declined to a mere 8,000 tonne during the last few days. Procurement operations are in only Madhya Pradesh and Uttar Pradesh .

Punjab and Haryana have contributed 10.8 mt and 5.8 mt, respectively, to the central pool till now. Other key contributors to the central pool are Madhya Pradesh (6.3 mt), Rajasthan (1.5 mt) and Uttar Pradesh (6.6 lakh tonne).

Last year, Punjab was the biggest contributor to the central pool with a record 13 mt while this year the northern state is expected to contribute about 11 mt. Similarly, Haryana is likely to contribute only about 7 mt against 8.6 mt last year.