The government has revised the estimate of wheat production in the 2021-22 crop year (July-June) to 105 million tonne (MT), down from its February projection of 111.32 MT, based on reports that the early onset of summer in March has adversely impacted crop yield. India’s wheat production was a record 109.59 MT in 2020-21 crop year.
However, official sources told FE that they are keeping a close watch on wheat exports and will take a call on if the exports need to be curbed later this month. “There is no case for controlling exports of wheat at present,” sources said.
Food secretary Sudhanshu Pandey said the lower output, coupled with private purchase from the farmers by exporters and traders holding on to the stocks would lead to a 55% year-on-year decline in wheat procurement in the 2022-23 marketing year to 19.5 MT. This means the purchases of the cereal by the government at minimum support prices (MSP) would hit a 13-year low this year.
The agriculture ministry will soon announce the third advance estimate of the country’s food grains output for crop year 2021-22, which will include the estimate of wheat output.
In 2010-11, wheat procurement was 22.5 MT and in 2016-17, it was 22.96 MT. MSP purchases of wheat stood around 17 MT as on Tuesday, down 42% from the year-ago level.
On the lower volume of wheat procurement, the food ministry has cited factors such as farmers in Madhya Pradesh, Uttar Pradesh and Gujarat selling to traders and exporters at around Rs 2,100-2,400 a quintal against the MSP of Rs 2,015 a quintal, and they are also holding some quantities, expecting higher prices of wheat after some months.
Free ration scheme: Additional 5.5 MT rice allocated to fill wheat gap
The government on Tuesday had revised the grain allocation under the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) during May-September, 2022, because of a sharp fall in wheat stocks held with Food Corporation of India (FCI).
As per the revised guideline, during the remaining five months of phase VI of PMGKAY, FCI will allocate 3.5 million tonne (MT) of wheat to states against the earlier communication to supply 9 MT of grain.
This move to allocate more rice than wheat came after the latter’s stock held with FCI as of May 1 dropped to a five-year low of 31 MT on May 1. “In order to mitigate scarcity-like situation and to ensure availability of sufficient stocks as per stocking norms, it has been decided to revise allocation during May-September 2022,” the food ministry wrote to states recently.
The food secretary said the government has allocated 5.5 MT of additional rice in place of wheat to states for distribution under the government’s free ration scheme PMGKAY.
Launched in 2020, as part of the Covid-19 relief measure, 5 kg of grain under PMGKAY is provided free each month besides highly subsidised foodgrain to more than 81 beneficiaries under the National Food Security Act.
While India is aiming at exporting more than 10 MT of wheat in 2022-23, given the lower level of procurement and stocks held with FCI, the government is likely to regulate exports to avoid domestic supply constraints.