India’s wheat procurement likely to be at 3-year high in 2024-25

An early start to wheat procurement has helped the Indian government to purchase 31 per cent of the arrival until March 31. In comparison, the purchase was less than 13 per cent of the arrivals in the year-ago period. Wheat arrivals were reported at 8.26 lakh tonnes (lt) in March this year, only 3 per cent more than the year-ago period, the higher procurement indicates that the message to the private trade has yielded the desired impact.

Food Ministry data show that wheat procurement has reached 2.56 lt until March 31, which is over two-and-half times higher than about 98,500 tonnes purchased in the year-ago period. The Centre has procured 2.52 lt from Madhya Pradesh, 3,325 tonnes from Rajasthan and 147 tonnes from Uttar Pradesh.

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May top target

“If the way private traders conduct their procurement continues, the government will definitely have higher procurement than last year and it may even exceed its target,” said the CEO of a leading private company having stakes in wheat trading and processing.

In 2023-24 season, the government had procured 26.2 million tonnes (mt) of wheat out of the targetted 34.15 mt and in 2022-23 only 18.8 mt was bought for the Central Pool against the target of 44.4 mt. Procurement season starts normally from April 1, but the actual purchase this year first started from March 13 in Rajasthan.

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While the Agriculture Ministry has pegged the wheat production at 112.02 mt for the 2023-24 crop year (July-June), the Food Ministry has pegged the likely procurement at 37.29 mt in the marketing year beginning April 1. The Centre hopes to buy 13 mt of wheat from Punjab, 8 mt each from Haryana and Madhya Pradesh, 6 mt from Uttar Pradesh and 2 mt in Rajasthan.

According to official data, the Centre has 9.69 mt of wheat in its reserve as of March 1, the lowest since 2017, when the stock was at 9.43 mt.

IMD forecast

India Meteorological Department on Monday released its weather forecast for the April-June period. “There is no heat wave warning for wheat-producing states except in Madhya Pradesh,” said IMD Director-General Mrityunjay Mohapatra. However, there is no threat to the wheat crop in Madhya Prades as 90 per cent of the harvesting is over there, he said. Madhya Pradesh is expected to produce 22.73 mt of wheat this yea.

With regard to other wheat producing states, the IMD DG said even if temperatures rise above 35 Degree, there will be no impact in Punjab, Haryana and Uttar Pradesh.

Meanwhile, traders said except in some parts of Madhya Pradesh, farmers are realising either the minimum support price (MSP) or more for their wheat. Some common-grade wheat is selling at about ₹2,160/quintal, even as the State Government has been buying the crop at ₹2,400 – ₹125/quintal higher than the MSP.

In Uttar Pradesh, where the government has bought less than 150 tonnes out of arrival reported at 24,000 tonnes, the market rates are in the range of ₹2,360-2,625/quintal. “When the demand in UP is so high after the bonus announced in MP and Rajasthan, it is difficult to enforce the unofficial ban on private traders, nor it is fair. Let farmers get better price and government also pays the bonus in UP,” said an industry official.

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