The Food Ministry has reportedly come up with an aggressive plan to procure about 37.3 million tonnes (mt) of wheat this year as the Centre’s buffer stock, maintained by the Food Corporation of India (FCI), may drop below the mandatory norm of 7.66 million tonnes (mt) by April 1. This will be for the first time in 16 years that wheat stocks, which are currently at 7-year low, will be below the buffer norms.
Earlier this month, the Ministry had announced that it estimates wheat procurement to be 30-32 mt in 2024-25 season beginning April and purchases to begin a month earlier from March 1 than normal April 1, depending on arrival.
Uttar Pradesh, the largest producer of wheat, has fixed a target of procuring record 6 mt. However, it is yet to buy any grain for the Central Pool after opening the purchase centres on March 1. “With the aim to buy maximum volume in April, the State government on Thursday asked some 40 big traders, stockists and flour millers not to enter market till the government procurement target is achieved,” said a source, who was present in the meeting.
However, when flour millers informed that they do not have stock to run their mills, officials asked them to buy only the required quantity for April and they would review the situation after April 15 based on the actual purchase. A district magistrate in UP has requested Railways not to accept indent from private sector for allocating rakes for the transport of wheat out of the State, sources said.
‘Don’t buy for trading’
Food Secretary Sanjeev Chopra held a meeting with flour millers on Friday where he is said to have conveyed the Centre’s resolve to buy as much wheat as possible without hindrance created. He clarified that the government has no issue as long as millers buy as per their processing requirements and not for trading purpose, sources said.
“The government actually needs about 23 mt of wheat annually for food security and other welfare schemes as seen from the pre-Covid offtake in 2019-20. The allocation was later downsized and replaced with rice due to lower procurement. Besides, it also needs more than comfortable stock for the open market sale, which may be around 10 mt extra as seen this year. Fixing a lower target may not be wise to achieve the minimum requirement of 33 mt,” said a top official of a leading private firm referring to past two years’ purchases.
He said the stock limit order currently valid until March 31, may be extended for another three months to keep stockists out of the market until June.
Below target purchases
In 2023-24 season, the government had procured 26.2 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.
According to official data, the Centre has 9.69 mt of wheat as of March 1, which is lowest since 2017, when the stock dropped to 9.43 mt (as of March 1) from 16.87 mt in same period in 2016. The Central Pool stock was at 5.8 mt on April 1 in 2008 and was marginally higher than buffer norm, at 8.06 mt in 2017 and 8.35 mt in 2023.
The Agriculture Ministry has pegged this year’s wheat production at a record 112.03 mt, out of which Uttar Pradesh is estimated to produce 35.48 mt, Madhya Pradesh 23.48 mt, Punjab 16.13 mt, Haryana 11.21 mt, Rajasthan 10.42 mt and Bihar 6.33 mt.