Despite a month-long delayed start to wheat harvest, progressive procurement of the cereal by Government agencies has picked up in the last few days, exceeding last year’s levels.
As on Tuesday, State agencies led by the Food Corporation of India (FCI) have procured 23.10 million tonnes (mt) of wheat, up 1.3 per cent over 22.80 mt during the same period a year ago.
“Wheat procurement, which was trailing till now, has gained momentum. Going by the current trend, total purchases could exceed last year’s 25 mt,” FCI sources said. The Government had set a procurement target of 31 mt for wheat this year.
Better crop Arrivals and procurement trend also indicate that the size of the crop could be better than last year. Also, damages to the crop on account of multiple spells of unseasonal rains over the past few months could be lower than what has been feared. According to the second advanced estimates, wheat production is expected to touch a record 95.6 mt this year.
The Food Ministry’s latest update shows that wheat procurement, so far, has exceeded last year’s levels in Haryana, Rajasthan and Madhya Pradesh, whereas in Punjab it is almost on a par with last year’s levels.
Rajasthan, which is giving a bonus of ₹150 a quintal over the Centre’s minimum support price (MSP) of ₹1,400 to farmers, has registered a 30 per cent rise in procurement this year, while in Madhya Pradesh, the increase is about one per cent.
In Haryana, the growth in procurement so far is about 7 per cent.
Private purchases However, in Uttar Pradesh – the largest wheat producing State – procurement by Government agencies has declined by more than half over last year.
Market arrivals, too, are lower. This could be attributed to active buying by private traders, led by exporters, millers and stockists.
As a result of active purchases being made by private trade, wheat prices have been ruling firm and above the MSP levels in almost all markets of UP this year.
Trade sources said exporters have so far contracted for overseas shipments of around 2 million tonnes, with buyers turning to Indian wheat amidst political turmoil in Ukraine.
The Central pool wheat stocks, as on May 1, stood at 34.4 mt, almost five times the buffer and strategic requirement of 7 mt, as on April 1.