Wheat stock with government may be lowest in 16 years

The Food Ministry is banking on the feedback of the Agriculture Ministry that is optimistic of a record wheat production this year to replenish its official reserves. Known as buffer stocks, official reserves will likely be the lowest in the last 16 years but around the mandatory buffer norm as of April 1.

“We expect that total area under cultivation of wheat will increase this year and God willing if the climate is alright, the production will be 114 million tonnes (mt). That’s what the Agriculture Ministry has indicated to us,” said Ashok Kumar Meena, Chairman and Managing Director of Food Corporation of India (FCI).

Procurement below target

Despite the Agriculture Ministry’s production estimate of 110.55 mt of wheat in 2022-23 crop year, the FCI could procure only 26.2 mt, missing the target of 44 mt. In 2021-22 too, the Agriculture Ministry estimated a bumper output of 107.74 mt, but the government procured only 18.79 mt. Private traders and industry have estimated much lower wheat production than the government estimates in both the years.

The government has already sold about 6 mt of wheat through the open market and to cooperatives so far. It is likely to sell another 2.5 mt until February-end taking the total offtake from official reserves in this fiscal higher than the 26.2 mt procured during the 2023-24 fiscal, officials said. The annual requirement of wheat for all schemes (excluding the open market sales scheme) is about 18.4-19 mt.

The buffer norm of wheat as on April 1 is 7.46 mt against which the stock with FCI was at 5.8 mt in 2008. After that it was marginally higher than buffer norm, at 8.06 mt in 2017 and 8.35 mt in 2023.

Acreage deficit

Meena said the government is hopeful of buying a good amount of wheat in 2024-25, depending on market prices and crop output. He said though there is a deficit in acreage of wheat in some States, it will likely be covered in the next few days as per Agriculture Ministry’s inputs. Till last week, wheat was planted on 320.54 lakh hectares (lh), marginally down from 324.58 lh a year ago, as per the official data. “If that is the level of production, we are very confident that we will be able to procure more than our requirement and also additional stocks needed for the Open Market Sale Scheme (OMSS) for next year,” he said.

Further, he said the government would try its best to provide a minimum support price (MSP) to wheat farmers. He said because the OMSS scheme started in June last week of the 2023-24 fiscal (as against January last week in the 2022-23 fiscal), prices have stabilised and are not higher than it was last year. “Since the wheat MSP has been hiked by 7 per cent this year, we hope that a lot of farmers will be willing to give their produce to FCI,” Meena said. The government has decided to start wheat procurement a month earlier (from March 1) than from usual April 1 as it expects early arrival in many parts due to normal sowing.

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