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G. Chandrashekhar

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Mumbai Feb. 20 The Centre has informally told the top corporates in the country's wheat business to refrain from purchasing the grain in major growing regions during the upcoming procurement season, according to sources in the wheat trade.

Large-scale purchases by the private sector last season at prices higher than the minimum support price were widely believed to have lifted the wheat market and reduced the Government's procurement through Food Corporationof India (FCI) to less than 10 million tonnes against the usual 14-16 mt.

New Delhi does not want the fiasco repeated this time, as the political price could be too onerous.

FCI is gearing to procure about 15 mt, sharply up from last year's 9.8 mt wheat.

The advice to keep off the market has sent shivers down the spines of major grains traders.

Corporates wary

Even the highest officials in the headquarters of various corporates are extremely wary of broaching the topic.

The fear of `action' against them is palpable. But the degree of response of each corporate varies.

At least one major corporate has decided to shut down its wheat division altogether. The head of the division reluctantly disclosed to Business Line in strictest confidence.

Another corporate with overseas interests has decided to `wait-and-watch'.

It is believed that a multinational corporation is evaluating various options and may even defy the Minister's friendly `request'.

Related Stories:
Procurement agencies told to buy adequate wheat
Wheat output estimated to touch 72.50 m tonnes
Lower wheat crop to spark price spike

More Stories on : Wheat | Agricultural Policy

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