The Food Corporation of India (FCI), the government's grain procurement and distribution agency, hopes to procure 18 mt wheat this season. As on date, the government agencies have procured 11.4 mt wheat, 60 per cent more than in the corresponding period last year. Almost 50 per cent of this has come from Punjab, while Haryana has contributed 3.7 mt, around 32 per cent. |
The procurement has also seen a significant jump in Gujarat and Madhya Pradesh, whose contribution to the central pool is otherwise not high.
"Having procured about 11.4 mt as on date, I am certain that we will end up procuring 18 mt this season. Peak arrival is likely to continue for another week, which should bring at least 6.3 mt more at a daily rate of 900,000 tonnes," said Alok Sinha, chairman and managing director, FCI.
Aided by a record wheat output of 76.78 mt and stable open market prices, the government appears certain to better its initial procurement target of 15 mt. As a result, it may not need to import wheat this year for the public distribution system. The country has been importing wheat for two consecutive years.
"A better grain procurement by the government shall ensure stable prices in the open market and ease pressure on inflation. With surplus stock, the government can intervene in the open market whenever there is a significant price increase," said a market expert.
Stable prices in the market over the last one year along with apprehensions of coercive government action on stockholding has kept private traders largely away from the grain mandis.
This is evident from the fact that the FCI and other government agencies have procured 94 per cent of the total mandi arrivals so far, compared with 78 per cent during the corresponding period last year.
Even wheat prices have cooled to Rs 1,070-1,080 a quintal, down about 5 per cent in the last one month. Despite widespread protests over rising inflation, the government can now relax as far as wheat is concerned. The commodity has a weight of 1.38 per cent in the wholesale price index (WPI).
The government has taken a host of measures to ensure adequate procurement of wheat. Apart from raising the procurement price from Rs 850 to Rs 1,000 a quintal, it has banned exports and imposed compulsory declaration for private purchases exceeding 10,000 tonnes.
Meanwhile, the Maharashtra government has decided to procure wheat for the central pool and will pay a bonus of Rs 100 a quintal, over the minimum support price of Rs 1,000 per quintal announced by the Centre.
