The wheat purchase by the government designated agencies is gathering momentum day by day as big corporate houses have almost stayed away from making much of the bulk purchases.
So far the wheat purchase by government designated agencies in 10 major producing states is 17.426 million tonne as against the target of 15 million tonne. The government purchase of wheat is increasing at an average rate of 3,38,512 tonne per day. The level of wheat procurement shows that the government would be able to meet its maximum buffer stock norm for the year which is set at 17.1 million tonne on July 1. According to the chairman and managing director of the Food Corporation of India (FCI), Alok Sinha, the main reason for the increased purchase of wheat by the government agencies is the remunerative minimum support price (MSP) for wheat fixed at Rs 1,000 a quintal and the big corporate houses shying away from making much of the bulk purchases.
He said,?Last year the purchases by government agencies were lower as the corporate houses made brisk purchases outside the regulated markets, which were tax free and went unrecorded. As a result wheat arrivals in the regulated markets were lower This year the government made it mandatory for the corporate houses to declare their purchases if it were above 10,000 tonne (last year this declaration limit was fixed at 50,000 tonne).?
When asked as to why the big corporate houses shyed away from making brisk purchases, Sinha said : ?possibly they are scared that they have to declare their purchases if they are above 10,000 tonne. Besides there are many public allegations that the corporate houses are purchasing grains and hoarding it to create artificial scarcity.?
According to Sinha, last year the corporate houses made purchases amounting to about 20% of the recorded arrivals while in the current season it was around 7%. The arrival of wheat in the regulated markets has increased to 18.97 million tonne as compared to 11.27 million in May 7 of the previous year.
