While consumers and even large traders in India have reason to rejoice in the wake of this year?s record wheat production of 748.9 lakh tonne, the highest production in seven years will still fail to keep stocks in Central pool above the buffer norm at the end of this fiscal.
According to a food ministry estimate, wheat stocks on April 1, 2008 would be only 31.14 lakh tonne, falling more than 22% short of the buffer stock requirement of 40 lakh tonne. This would mean the country would have to import at least 8.86 lakh tonne to bridge the shortfall.
This could prove costly as international wheat prices are rising due to global shortages. The latest government contract to buy 7.95 lakh tonne of wheat was awarded for $389.45 a tonne, about $60 higher than its earlier tender price. Interestingly, the shortage in government stock has not led to any rise in wheat prices, which shows there is no significant hoarding.
The food ministry?s estimated shortage is contrary to Food Corporation of India?s claims that there would be enough wheat stocks for the norm to be met. Agriculture & food minister Sharad Pawar had also said on Wednesday that the government had sufficient supplies of wheat to meet demand, adding that no imports were needed at the moment.
According to food ministry calculations, the Central pool had a stock of 110.08 lakh tonne of the grain on September 1. Another 13.06 lakh tonne of wheat import has been contracted, taking the total availability to 123.14 lakh tonne as on September 7.
Of the available amount, 82 lakh tonne has been allocated to the public distribution system for September 2007 to March 2008. Another 10 lakh tonne has been earmarked for welfare schemes and relief operations, leaving just 31.14 lakh tonne in the central pool. The opening balance of wheat on April 1 this year was 47.03 lakh tonne. ?Even if we have to reach the same level of wheat stocks on April 1, 2008, the import of another 15.89 lakh tonne of wheat will be necessary,? a report by the ministry points out.