Food Corporation of India (FCI) on Tuesday announced that wheat procurement has commenced in all the States and it is confident of procuring 34.15 million tonnes (mt) as estimated for the 2023-24 season (April-March).

Experts suggested that the government should exercise caution in its procurement strategies, considering that only 10,727 tonnes were procured on the first day out of the reported arrival of 0.56 million tonnes in Madhya Pradesh.

Briefing media, FCI’s Chairman and Managing Director Ashok K Meena said the export ban on wheat would not be lifted as long as the government does not feel comfortable in domestic supplies. He also said that wheat production would not be affected due to recent rains and the country could see a record output of 1121.8 lt as estimated by the Agriculture Ministry.

Wheat procurement is crucial for the government as due to a drop in production last year, the procurement hit a 15-year low of 18.79 mt in 2022-23. This resulted in an indefinite ban on export and prices of the cereal reaching an all-time high of ₹32/kg.

Meena said due to the government’s intervention in offering 5 mt under open market sale scheme (OMSS), wheat prices in mandis have declined to ₹22-23/kg now from ₹30 in last week of January. Of the 3.38 mt sold in open market through auction, as much as 3.21 mt have already been lifted, he said.

Procurement target

The government has set a target to purchase 13.2 mt in Punjab, 8 mt in Madhya Pradesh, 7.5 mt in Haryana, 3.5 mt in Uttar Pradesh and 1 mt in Bihar.

When asked about the reason for the lower procurement estimate in Madhya Pradesh, which was the top contributor (12.94 mt) to the central pool stock in 2020-21, he stated that there was no drop in production and the estimate was reached after consultation with the State government.

“The situation is not the same as last year since there is no possibility of opening the export. Even after this, the private sector buys above the minimum support price (MSP), the government will find difficulties in achieving procurement target. But, even if it is able to buy 17 mt that will be enough to meet buffer and PDS requirement of 25.5 mt as already the stocks are 1 mt above buffer norms,” said a former executive director of FCI.

If the government is to consider relaunching PMGKAY and also to keep stock for OMSS, additional wheat will be needed, he said adding some prudent policy would help achieve the targeted procurement.

Meena said the opening stock of wheat as on April 1 is likely to be 8.4 mt (excluding current procurement that started earlier than normal April 1), against buffer norm of 7.5 mt. He also said the Centre will send team as and when required if demand for quality relaxation comes from States.

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