Wheat for open market sale scaled up by 277%

The government released around 9,00,000 tonne wheat for open market sale in the year to March, 277 per cent more than a year ago. The sharp rise was to check prices, an official said.

In December, wheat prices topped Rs 1,000 per 100 kg because of tight supply.

To check prices, the government said in January it would release 4,50,000 tonne of the cereal for open market sale in January-March. However, the volume released was scaled up to 6,98,000 tonne.

The higher supply pushed wheat price down to around Rs 850-900 per 100 kg in north India, the official said.

But the higher supply failed to check prices in the southern states.

To augment supply, the government decided to import the commodity this year after a gap of seven years. It is importing 5,00,000 tonne duty-free wheat from Australia's AWB at $178.75 a tonne through the State Trading Corporation. The delivery will be at five ports in south India. The first shipment of 50,000 tonne is due this month.

The higher volume allocated for open market sale, dented the government's buffer stock. On April 1 it was down to 2.1 million tonne compared with the norm of 4 million tonne.

To shore up the buffer, an additional 1.5-2 million tonne wheat is likely to be imported, according to Agriculture Minister Sharad Pawar. In the current season, the government plans to buy 16.2 million tonne wheat.

Another official said even if the government manages to meet the procurement target for the current year, it would still fall 70,000 tonne short of the total amount that is required for distribution under state-run welfare schemes.

According to official estimates, this year India is likely to produce 73 million tonne, 1 million up from last year.