Private wheat procurement falls 43%
Ajay Modi New Delhi Govt regulation on stock declaration keeps private firms in check.
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Wheat purchases by big companies have dropped 43 per cent this year compared with last year, following the government regulation on stock declaration of purchases. |
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Moreover, these companies also have the option of importing wheat as the government has allowed duty-free wheat import for the entire calendar year 2007. |
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According to government estimates, big companies like ITC, Cargill and AWB India, among others, procured 20 lakh tonnes wheat in 2006-07 rabi season at rates higher than the minimum support price (MSP) of Rs 650 per quintal. |
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This resulted in a shortfall with government procuring only 92.3 lakh tonnes, down 55.7 lakh tonnes from 148 lakh tonnes in 2005-06. Consequently, the government was forced to import 55 lakh tonnes of wheat to meet its requirement towards the public distribution system (PDS). |
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However, these companies have purchased only 11.26 lakh tonnes so far this year. Of this, ITC has bought 6.49 lakh tonnes, Cargill 1.96 lakh tonnes, Britannia 1.07 lakh tonnes, AWB India 1.01 tonnes and Delhi Flour Mills 0.72 lakh tonnes. |
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The low purchase by the private companies, coupled with better production, has helped the government procure higher quantity of wheat this time. |
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As on May 31, government agencies have procured 105.82 lakh tonnes, 14.77 per cent higher than last year's corresponding purchase of 92.20 lakh tonnes and 14.6 per cent over last year's total purchase of 92.31 lakh tonnes. |
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According to the Ministry of Agriculture, the country is likely to produce 73.7 million tonnes of wheat this rabi season against last year's 69.35 million tonnes. |
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This year, the government had issued orders for the declaration of wheat stocks on a regular basis if the total total purchases are more than 0.5 lakh tonnes by a company or an individual under the Essential Commodities Act. This was done to minimise the potential for market distortions by purchase of large quantities of wheat by corporate trading firms. |
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Further, the Ministry of Railways was also requested to give daily information to the FCI on the booking of rakes and the movement of wheat on private account. |
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