Wheat procurement falls, but no shortage: FCI

Wheat procurement falls, but no shortage: FCI

Procurement figures declined majorly due to lower arrival of grains at around 25.6 mn tonnes.

Pooja Jain

On the back of lower output of grains, the procurement of wheat has declined by 18%. About 22.9 million tonnes has been collected so far for FY2016-17 due to lower output even as the forecasted estimates were high and the process of purchase is at its culmination stage. The bulk procurement is usually completed between April- June.

State-run Food and Corporation of India (FCI), which is responsible to procure and distribute the foodgrains, had purchased 28 million tonnes of wheat in FY 2016 marketing year.

Reaffirming FCI’s stance that there will be no shortage of wheat in the country, Maher Singh, Deputy General Manager, (Contract, Procurement, Commercial & Control Room), stated that Punjab being the second largest wheat producing state in India also could not meet its estimated target. “Owing to the soaring temperatures during summers specifically in March, the output lowered resulting in marginal difference in procurement as against the estimated target set for Punjab,” he added.

So far, Punjab has procured 106.45 lakh metric tonnes as against the target of 120 lakh metric tonnes.

The procurement figures have narrowed majorly due to arrival of grains less than the estimated level. The output stood around 25.6 million tonnes against 31 million tonnes of output recorded in the previous agricultural marketing season.

However, the officials from FCI believe that the country will not fall short of wheat as the current buffer stock comprises of 31 million tonnes of wheat, surpassing the buffer norm of 27.5 million tonnes.

Keeping in view the falling procurement, the Centre is considering to trim down the capacity of wheat that can be sold at Open Market Sale Scheme in 2016-17. In FY16 in the Open Market Sale Scheme, about 10 million tonnes of wheat was sold.

According to the 3rd Advance Estimate by the Ministry of Agriculture, India’s total production, in 2015-16 crop year, increased to 94.05 million tonnes from 83 million tonnes of production in previous crop year.

During agricultural year (June-July), the Directorate of Economics and Statistics, Ministry of Agriculture, releases four Advance Estimates, which are then followed by Final Estimates of output of main agricultural crops.

The fourth Advance Estimates furnished fully with firm data on yeilds of Kharif and Rabi available with states, are rolled out in July-August.

So far, the private players traded for 5 lakh tonnes of wheat from France and Australia. Of the 5 lakh tonnes, 350,000 tonnes of wheat was brought from Australia while the remaining 150,000 tonnes was procured from France.

Earlier in August 2015, government imposed 10% duty on wheat imports and later increased it to 25% in October 2015 as global prices declined and rise of imports had an adverse impact on domestic producers. However, India is still the second largest wheat producer in the world.

The Dollar Business Bureau - Jun 24, 2016 12:00 IST