Fall in PDS wheat offtake defies logic for import

While the government is keen on importing wheat at exorbitantly high prices, there has been a drop in wheat offtake under the public distribution system (PDS).

Ironically, it is for PDS that the government procures wheat through the Food Corporation of India (FCI). It was also considering imports to meet a shortfall in procurement, if any, for PDS.

For the month of June, the Centre's allotment of wheat for the Antodaya Anna Yojana, below poverty line cardholders and above poverty line cardholders in various states was 942,811 tonnes. However, the offtake was only 715,100 tonnes, about 24 per cent less than the allotment.

For 2006-07, the allotment of wheat for PDS was 14.4 million tonnes. However, the offtake was only 10.3 million tonnes, about 28.4 per cent less than the allotment. The data show that more people are buying wheat from the open market. At 10.3 million tonnes, the average monthly offtake works out to only 858,000 tonnes.

"It is a good sign that more and more people are buying from the open market," said Alok Sinha, chairman and managing director, FCI.

Taking this year's June offtake as the monthly average, the PDS wheat requirement for nine months (July 2007-March 2008) until next procurement begins would be 6.43 million tonnes.

Even if we consider an additional offtake of 200,000 tonnes for the September-October period (the festive season) and an open market intervention by the government to the tune of 10 lakh tonnes, the demand would be 7.83 million tonnes.

On July 1, the central pool had a wheat stock of 12.9 million tonnes. To this, we can add the imported quantity of 511,000 tonnes, taking the available stock to about 13.4 million tonnes.