 "Storage: FCI in comfort zone")
Food Corporation of India (FCI), which has been facing a severe space crunch during the past few wheat procurement seasons (April-May), might be in a better situation this year, owing to adequate storage space and as procurement is lower than the initial targets.
Also, lifting of stocks had increased, said an official assessing the storage situation.
Following the addition of 12 million tonnes (mt) of capacity under the entrepreneur guarantee scheme, the corporation is discontinuing existing rental capacities taken on short term contracts, cutting costs. Due to lower stocks and de-hiring of storage, capacity has declined from 79 mt in October 2013 to 75 mt in April 2014. As on April 1, foodgrain stocks stood at 38.12 mt (17.83 mt of wheat and 20.28 mt of rice).
As on April 1, India had an opening stock of 38.12 mt of foodgrain, against 59.75 mt on April 1, 2013. However, this does not include around 10.2 million tonnes of un-milled rice which FCI is yet to purchase from millers. If the 31-mt procurement target is met, considering FCI’s monthly food grain transportation of four mt, the additional storage space will have to be de-hired. “We have projected foodgrain stock of 60-61 mt by June, which means lower requirement,” said an official.
Owing to inclement weather, Madhya Pradesh might see a slight drop in procurement. An official said all other states were expected to meet their targets. Of the wheat procurement, a substantial part is expected to be over by May-end.
Traditionally, FCI requires more space during the procurement season, especially for wheat. For this, it enters into monthly storage contracts with private warehouses. FCI’s storage capacity stands at 37 mt, of which 34 mt is conventional storage and three mt is cap storage (covered plinths). Of the conventional storage, 21 mt is hired from private players.
The centre incurs Rs 6.14 a quintal a month on preservation of wheat for private storage. Lower dependence on hired storage will result in a cut in costs. Sources confirmed due to better movement of grain and additional space creation under the entrepreneur guarantee scheme, FCI has been able to de-hire space.
“The Central Warehousing Corporation and state warehousing corporation space is hired under annual contracts but from private players, it is taken on a monthly basis,” said an FCI official. “We are currently using 70 per cent of our storage space and with the movement of three-four mt every month, we may be using 90 per cent of our capacity in May, when the wheat stock reaches culmination.”
In 2012, the Centre had approved additional capacity of 20 mt—18 mt was to be added as conventional storage and two mt to be earmarked for modern scientific storage (silos). Till April, 12 mt of conventional storage space had been created across states. The creation of silos is under process, and bids for 1.5 mt of capacity were received last week.
Also, lifting of stocks had increased, said an official assessing the storage situation.
Following the addition of 12 million tonnes (mt) of capacity under the entrepreneur guarantee scheme, the corporation is discontinuing existing rental capacities taken on short term contracts, cutting costs. Due to lower stocks and de-hiring of storage, capacity has declined from 79 mt in October 2013 to 75 mt in April 2014. As on April 1, foodgrain stocks stood at 38.12 mt (17.83 mt of wheat and 20.28 mt of rice).
As on April 1, India had an opening stock of 38.12 mt of foodgrain, against 59.75 mt on April 1, 2013. However, this does not include around 10.2 million tonnes of un-milled rice which FCI is yet to purchase from millers. If the 31-mt procurement target is met, considering FCI’s monthly food grain transportation of four mt, the additional storage space will have to be de-hired. “We have projected foodgrain stock of 60-61 mt by June, which means lower requirement,” said an official.
Owing to inclement weather, Madhya Pradesh might see a slight drop in procurement. An official said all other states were expected to meet their targets. Of the wheat procurement, a substantial part is expected to be over by May-end.
Traditionally, FCI requires more space during the procurement season, especially for wheat. For this, it enters into monthly storage contracts with private warehouses. FCI’s storage capacity stands at 37 mt, of which 34 mt is conventional storage and three mt is cap storage (covered plinths). Of the conventional storage, 21 mt is hired from private players.
The centre incurs Rs 6.14 a quintal a month on preservation of wheat for private storage. Lower dependence on hired storage will result in a cut in costs. Sources confirmed due to better movement of grain and additional space creation under the entrepreneur guarantee scheme, FCI has been able to de-hire space.
“The Central Warehousing Corporation and state warehousing corporation space is hired under annual contracts but from private players, it is taken on a monthly basis,” said an FCI official. “We are currently using 70 per cent of our storage space and with the movement of three-four mt every month, we may be using 90 per cent of our capacity in May, when the wheat stock reaches culmination.”
In 2012, the Centre had approved additional capacity of 20 mt—18 mt was to be added as conventional storage and two mt to be earmarked for modern scientific storage (silos). Till April, 12 mt of conventional storage space had been created across states. The creation of silos is under process, and bids for 1.5 mt of capacity were received last week.
The availability of more storage space this season is evidently due to lesser opening stock of 38.12 million tone as on April 1, 2014 as compared to 59.75 million tone on April 1, 2013.
The wheat procurement target is fixed at 31 million tone for this year. Except for Madhya Pradesh, rests of the states are expected to meet the target, told FCI official.