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Wheat procurement may miss revised target of 19.5 mt

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Agri Business

Grain’s daily arrivals at mandis down to one lakh tonnes

Food Corporation of India (FCI) may find it tough to meet the revised wheat procurement target of 19.5 million tonnes (mt) as the government purchases till now this year are 48 per cent lower year-on-year.

Procurement of the grain in the ongoing season declined to 17.8 mt as of May 11 from 34.18 mt a year ago, according to the latest data. With the current trend likely to continue for a few more weeks, the government is unlikely to purchase even its revised target of 195 lakh tonnes (lt) this year.

While saying that the government stocks with the FCI will be higher than buffer norms of 7.5 mt as of April 1, 2023, Union Food Secretary Sudhanshu Pandey, on May 4, said procurement might be about 19.5 mt. As the government had initially targeted to buy 44 mt of wheat this year, Pandey had attributed the decline to private traders buying more on export demand.

Daily arrivals

The daily arrival has dropped to about 1 lakh tonnes currently against 4 lt a year ago, while it was 7.4 lt on April 21, the day when there was a drastic drop in supplies from farmers. Arrivals were over 17 lt on April 20. Even in Uttar Pradesh, Bihar and Madhya Pradesh – the three States on which the government is pinning its hopes – the daily arrivals are now substantially down.

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The combined arrivals on May 10 in these three States were down by 75 per cent to 79,040 tonnes from the year-ago period. Sources said even the meagre arrivals in Madhya Pradesh are due to the State government’s push. Otherwise, it would be difficult to get even one thousand tonnes. As farmers are getting ₹2,100-2,200/quintal (against minimum support price of ₹2,015) at the village-level in Uttar Pradesh, the procurement centres recorded only 5,557 tonnes of arrival on May 10, whereas it was six times more a year ago.

Punjab procurement

The Punjab government has already announced the closure of procurement centres/mandis in phases from May 5, though the official purchase is supposed to end on May 31. In Haryana, the procurement is almost over, earlier than normal May 15. Procurement period in Uttar Pradesh, Madhya Pradesh and Gujarat will continue till June 15.

From May 10 till the last day of procurement in 2021, the government had purchased over 9 mt which is the reason why some officials still believe the target of 19.5 mt is achievable, sources said. However, this year is an exception as wheat farmers in east UP and Bihar are also getting prices higher than MSP for their produce. It is the first time such a thing is happening and it looks like it could be difficult to purchase another 1.7 mt for the Central Pool. In all likelihood, there will be another revision in the allocation of wheat for different schemes after May 31 when it will be clear how much quantity is procured, said a source.

Published on May 11, 2022

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