Govt’s wheat purchases set to decline due to fall in output and higher demand by private players

Vibha Sharma

New Delhi, May 5

Due to an increase in market prices, higher demand by private players for domestic and export purposes and expected fall of 5.7 per cent in the output, the Centre’s wheat procurement is expected to decline by more than half to 19.5 million tonnes in the current rabi marketing season.

The Centre has, in fact, revised downwards the estimate for wheat production to 105 MT in the 2021-22 crop year from the earlier projection of 111.32 MT due to productivity being affected due to early onset of summer this year.

“The lowering of estimates has been attributed to early summer, which affected crop yields in growing states, especially Punjab, Haryana and Uttar Pradesh. The production is lesser due to early summer and shrivel grain,” Food Secretary Sudhanshu Pandey said on Wednesday.

Ruling out any concern over meeting the domestic demand for PDS or the possibility of imposing any curbs on exports, Pandey said the purchase by the government agency is less because of increase in market prices and higher demand by private players, both for domestic as well as export purposes.

“Due to higher market prices, wheat is being bought by traders at a higher rate than MSP, which is good for farmers. In MP, UP, Rajasthan, Gujarat, farmers are selling wheat to traders/exporters at 21-24 Rs per kg, more than MSP (20.15 Rs/kg)

“Earlier, farmers had no option but to sell their produce to the government. Now, they are selling only that quantity to the government which they are unable to sell in the private market. Therefore, from that perspective, the government procurement has reduced,” Pandey added.

The government does not want to impose curbs on wheat exports, rather it is facilitating traders. “Export markets, like Egypt, Turkey and some European Union countries, are opening to the Indian wheat. Agri-export promotion body APEDA is facilitating the shipments,” he said.

Private traders have contracted for export of 4 MT for the current quarter, of which 1 MT (11 LMT) have already been shipped, he said. Indian traders have a window for exports till June when the wheat crop from Argentina will arrive, thereby increasing the global availability and reducing pressure on India”, the Food Secretary said.

“The government’s wheat procurement has reduced but the availability and procurement of rice is sufficient to meet the demand under the National Food Security Act,” he added

“After meeting the requirement of welfare schemes, on April 1, 2023, India would have stocks of 80 LMT of wheat, well above the minimum requirement of 75 LMT,” Pandey said

The procurement has touched 17.5 MT so far, a figure that may touch 19.5 MT in the 2022-23 marketing year. Another 2 MT of wheat is expected to be added from Madhya Pradesh and Uttar Pradesh.

Earlier, the government had fixed a wheat procurement target at 44.4 MT for 2022-23 as against an all-time high of 43.34 MT in the previous marketing year.