The Hindu Business Line : Wheat stocks plummet to 14.3 mt

Low wheat stocks with official agencies would not only put a question mark on food security, but the Government's social welfare programmes like food-for-work and the proposed employment guarantee scheme could also be severely constrained.

Farmers separating the husk at a grain market in Amritsar.

New Delhi , June 6

THOUGH the Government is not acknowledging it officially, concern is growing about the availability of wheat in the country in the coming months.

Market trends indicate that official stock of wheat with Government agencies could be the lowest since 1998 and just about meet the buffer stock norms for July 1.

Latest reports from the procurement centres suggest that wheat stocks with the Government on the first of next month could be around 14.3 million tonnes (mt) which is the lowest level since July 1, 1998, when it touched 16.5 mt. With the minimum buffer norm set by the Government for July 1 each year at 14.3 mt, wheat stocks may just about hit the stipulated minimum buffer level.

Progressive procurement of wheat by Food Corporation of India (FCI) and other Government agencies was at 14.74 mt as of June 3 and progressive market arrivals were at 15.87 mt. With the rabi marketing season virtually over and with hardly any fresh arrivals coming into the market, maximum procurement is estimated to be in the range of 14.8 mt. Last year, procurement by June 3 was 16.26 mt and progressive market arrivals were 17.5 mt.

Now, the opening stock position of wheat as on April 1 this year was at 4.06 mt. The average monthly offtake of wheat from the Central pool is 1.5 mt per month, going by the annual trend. Thus, the offtake for the three-month period of April-June 2005 is estimated to be about 4.5 mt.

Therefore, with an estimated procurement of 14.8 mt by June-end, stocks of 4.06 mt as on April 1 and an estimated offtake of 4.5 mt during April-June, the overall stock position of wheat as on July 1 is likely to hover around 14.3mt-14.4 mt, the minimum buffer stock required for meeting public distribution system (PDS) needs.

Moreover, even as the Government claims that wheat production during 2004-05 is likely to be in the 73.5 mt range, independent estimates suggest that production would be only around 71 mt. In 2003-04, wheat production was at 72.1 mt. Low wheat stocks with official agencies would not only put a question mark on food security, but the Government's social welfare programmes such as food-for-work and the proposed employment guarantee scheme could also be severely constrained.

To make things worse, in case the monsoon does not turn out to be normal, importing wheat could be the only option left for the Government.

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