'Don't fancy a killing in wheat trade this year'

TRADE TALK: Alok Sinha

The wheat procurement of 2006-07 rabi season is going to start in about two weeks from now. Ajay Modi talks to Alok Sinha, chairman and managing director of Food Corporation of India (FCI), on this year's procurement plans.

What quantities of wheat are you hopeful of procuring?

Our internal calculations together with the state's feedback indicate that procurement is likely to cross 13 million tonne. Punjab is likely to contribute 10 million tonne, while Haryana may add another 3 million tonne. Rest will come from Uttar Pradesh.

Last year, FCI managed to procure only 9.23 million tonne compared with 14.79 in the year before. What makes you think this year's procurement will be better?

Firstly, the farm output estimates of 73-74 million tonne will be 3.5-4 million tonne higher over last year's production. Secondly, our buffer stock will be 4.5 million tonne compared with 2.09 million tonne when we start production. This will give a positive signal for procurement.

Also, the higher minimum support price (Rs 750 a quintal as against Rs 650 last year) will allow us to procure more.

Last year, private companies had procured sizeable wheat from the mandis on the back of their better price offer. Do you see any competition from them this time?

I personally see no competition threat from private trading firms. Wheat arrivals this year will be adequate to allow procurement by both the parties.

Is the MSP of Rs 750 a quintal good enough for farmers? Should there be a bonus?

It is too early to say if the current MSP will give us better procurement than last year. A timely announcement of bonus may complement the higher MSP.

Has all the preparations been made to start procurement?

Yes. We have bought 300 crore gunny bags with a capacity of 50 kg each. This will be sufficient to pack 15 million tonnes wheat.

What has been done to minimise storage losses?

We have installed electronic weighbridge at all major godowns to cut down losses. Our storage losses have come down from .80 per cent to .29 per cent over last ten years. We are also taking disciplinary action against employees who are responsible for such losses.