The Hindu Business Line : Wheat buying hits record 20.71 million tonnes

Surpassing all expectations — official and unofficial — wheat procurement by the Government agencies has hit an all-time-high during the current 2008-09 rabi marketing season (April-March).

As on Friday, Food Corporation of India (FCI) and the State agencies had bought 207.10 lakh tonnes (lt) of wheat from the various mandis of the country breaking the previous record of 206.30 lt, achieved in the 2001-02 season.

And with daily procurement still in the region of 1.8-1.9 lt, there is every possibility of the total purchases ending up in excess of 210 lt (the bulk of the wheat gets marketed by early June).

The current year’s record procurement is in contrast to the 111.28 lt and 92.26 lt levels of the preceding two seasons, with the latter, in fact, being the lowest ever since the 81.57 lt of 1996-97.

Conscious efforts

A significant reason behind the turnaround this year has been the conscious efforts by the Centre as well as the State Governments to make purchases from outside of Punjab and Haryana. In 2007-08, out of the total 111.28 lt, over 91 per cent was accounted for by these two States (67.81 lt from Punjab and 33.50 lt from Haryana), with Uttar Pradesh (5.46 lt), Rajasthan (3.83 lt), Madhya Pradesh (0.57 lt) and Bihar (0.08 lt) contributing relatively smaller quantities.

But this time, the Government agencies have so far mopped up unprecedented levels of wheat from Madhya Pradesh (18.73 lt), Rajasthan (8.72 lt), Gujarat (3.41 lt) and even Bihar (2.08 lt).

Uttar Pradesh, too, has witnessed a more than four-time jump in cumulative procurement (22.91 lt), even as Punjab (98.43 lt) and Haryana (52.02 lt) have provided an extra 49.14 lt over last year.

High support prices

The States outside of Punjab and Haryana have all put together contributed the balance additional 46.68 lt to the Central pool this year.

An enabling factor here was the high minimum support price of Rs 1,000 a quintal offered by the Centre, with States such as Madhya Pradesh even offering an extra Rs 100.

The high support prices, in conjunction with stringent stock-and-purchase declaration norms imposed by the Centre, deterred corporates and other big buyers from entering the market and leaving field open for the Government agencies.

In 2007-08, multinationals and corporate houses reported total wheat purchases of 24.62 lt, of which Madhya Pradesh (8.50 lt), Uttar Pradesh (4.69 lt), Delhi (3.21 lt), Rajasthan (2.27 lt) and Gujarat (2.02 lt) accounted for the bulk.

Unlike in the case of FCI and State agencies, the big private players sourced just eight per cent of their wheat from Punjab (0.76 lt) and Haryana (1.29).

In the current season, procurement by companies amounted to a mere 3.37 lt, including 0.69 lt from Gujarat, 0.21 lt from Madhya Pradesh, 0.16 lt from Rajasthan and 0.15 lt from West Bengal (figures as on May 2).

Not a single grain has been bought this time from Punjab, Haryana, Delhi and Uttar Pradesh.