February 18, 2008

Indian government asks provinces to increase wheat procurement for 2008-09

India's federal government has asked provinces to increase their wheat procurement during the crop marketing year starting April from the average 14 million-15 million tonnes in order to build up stocks, a government official said Friday (February 15).

The official said the procurement target of wheat buys for the provinces during the coming year could be as high as 20 million tonnes.

The decision was taken at a meeting of provincial government officials and the Centre early this week.

"We have raised the market intervention prices of wheat sharply this year by INR1,500 a tonne to INR10,000/tonne," said the government official. "Hence, we expect the provinces to procure as much as possible this year."

Low procurement of wheat at around 12 million tonnes last year had made the country rely on imports of the grain despite high global prices.

However, these imports have ensured that wheat stocks in government granaries ends this year at a comfortable level of 5 million tonnes compared with 4 million tonnes the year before.

According to latest government estimates, India's wheat crop in the year to June this year is expected to fall by 1 million tonnes to 74.81 million tonnes.

During October 1 to February 15, India's wheat sowing was at 27.73 million hectares, down from 28.21 million hectares a year earlier.