Centre rules out curbing wheat exports despite drop in output, procurement

According to Centre's assessment, closing stock of wheat in FY23 is expected to be about 8 mn tonnes, higher than 7.5 million tonnes buffer requirement

India’s wheat production in 2022-23 marketing is expected to fall by almost 5.7 per cent to 105 million tonnes from an earlier estimate of 111.32 million tonnes and official purchases are set to halve to just 19.5 million tonnes, but still it won’t impose any curbs on exports as year-end closing stocks are seen adequate after meeting all requirements.

Detailing for the first time, the country’s official position on several critical issues related to wheat exports and production, Food Secretary Sudhanshu Pandey today said the agriculture ministry has revised the wheat production estimate downwards to 105 million tonnes for the 2021-22 crop year from 111.3 million tonnes earlier due to early onset of summer.

"We are still in a surplus situation...The government's wheat procurement has reduced. But the availability and procurement of rice is sufficient to meet the demand under the National Food Security Act," Pandey added.

As per Centre's assessment, despite drop in production and procurement, closing stock of wheat in FY23 is expected to be around 8 million tonnes, higher than the 7.5 million tonnes required for buffer stocks. (see chart)

India's wheat production stood at 109.59 million tonnes in the 2020-21 crop year (July-June).

The secretary also ruled out a possibility of imposing any curbs on wheat exports as farmers are getting higher than the Minimum Support Price (MSP) for their produce.

"We don't see a case for any control on exports. .... Wheat exports are on and in fact the government is facilitating the traders," Pandey told reporters at a press conference.

He said on the contrary new export markets such as Egypt, Turkey and some European Union countries are opening for Indian wheat and the agriculture export promotion body APEDA is facilitating the shipments.

Pandey said that private traders have contracted for export of 4 million tonnes for the current quarter, and 1 million tonnes have been shipped already.

Meanwhile, on procurement, the food secretary said that government's wheat procurement is expected to fall to 19.5 million tonnes in the 2022-23 marketing year (April-March), much lower than the last year, due to several factors, including higher market prices of wheat in some states compared to the minimum support price (MSP), stocks being held by farmers and traders in anticipation of further price rise and lower production than estimated in some states.

Pandey said the government has allocated 5.5 million tonnes of additional rice in place of wheat to states for distribution under the government's free ration scheme PMGKAY.

“This will free up around 5.5 million tonnes of wheat but will entail an additional subsidy of around Rs 4800 crore,” Pandey said.

The Centre has launched the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) to provide free foodgrains to over 80 crore beneficiaries covered under the National Food Security Act as part of its efforts to reduce the hardships of people during the coronavirus pandemic.

Under the scheme, the Centre provides 5 kilograms of foodgrains per person per month free of cost. The additional free grain is over and above the normal quota provided under the NFSA at a highly subsidized rate of Rs 2-3 per kg.