January 15, 2013

India may face storage problem on excessive grain stocks

As the country prepares to harvest another bumper wheat crop in 2013-14 season, India's food grains stocks in state-run warehouses have been estimated to be more than double the required quantity, which could pose some serious problem of storage.

The wheat procurement season will start from April 1, 2013, while for rice it has already started On October 1, 2012.

According to the Food Corporation of India (FCI), grain stocks in warehouses were 66.7 million tonnes, almost 167% more than the required quantity of 25 million tonnes as on January 1, 2013. The inventories will soar as the on-going rice procurement has been better than last year so far. 

According to an official statement, India's state agencies and Food Corporation of India (FCI) have together procured around 25.09 million tonnes of rice in the 2012-13 procurement season that started from October, almost 6% more than the same period last year, mainly from Punjab, Haryana, Chhattisgarh and Andhra Pradesh. However, the case is not the same with eastern states, where rice procurement has been slugging because of inadequate procurement mechanism.

The government has sought some information from states on instances of distress sale by farmers to frame its price policy for the next kharif sowing season, which will start from June 2013. The information was sought after reports that farmers are being forced to sell their produce at 10-20% below the MSP in some parts of eastern India because of inadequate procurement facilities.