With procurement in the wheat-growing belt slated to begin in a few weeks, Food Corporation of India (FCI) may face a problem of plenty with the country’s largest food grain agency grappling to hold the mounting stocks.
Officials of the agency might be scouting schools and rented warehouses to store close to 10 million tonnes (MT) wheat with its own warehousing capacity limited and wheat procured in 2008, after a record crop, grabbing most of the space.
Officials said a marathon effort was on to move wheat from the three states of Punjab, Haryana and Uttar Pradesh to other regions in central and southern India, ahead of the new procurement season. But it is still likely to be faced with a storage problem.
A senior government official today said central and state agencies are likely to procure at least 20 MT wheat from farmers in 2009, marginally lower than the record buys of 22.4 MT last year, on a smaller than anticipated crop.
India produced 78.4 MT wheat last year. Output this year is expected to fall marginally to about 78 MT as a warmer winter could trim the yield.
The official said though the government has raised the minimum support price of wheat to Rs 1,080 a quintal from Rs 1,000 last year, procurement would take a hit due to limited storage space with the Food Corporation.
He said the FCI is likely to face a storage crunch of around 10 mln tn this year, as it already has large quantities of unsold food grain in the major wheat growing states.
“In Punjab alone, FCI will face a space crunch of at least 5 MT for storing wheat, while in Haryana it could find it difficult to store up to 3 MT wheat,” the official said.
Last year, the government bought about 10 MT wheat in Punjab and around 5.5 MT in Haryana.
The government has not been able to liquidate a large part of wheat procured last year. It had about 16.8 MT wheat stocks on February 1, most of it in Punjab, Haryana and Uttar Pradesh, and is likely to have a carryover of over 13 MT on April 1 after accounting for requirements under state-run welfare schemes and open market sale scheme.
