April 6, 2011
 

India may struggle to store a record wheat crop

 

 

India's overflowing state-run warehouses will likely struggle to store a record wheat crop for the second year in a row, which may spur the government to lift a ban on the grain's export, officials said on Tuesday (Apr 5).

 

The government is aiming to procure 26 million tonnes of wheat this year, 15% more than last year. A decision on lifting the export ban, imposed in 2007, is expected in May after procurement ends.

 

Junior Farm Minister Arun S. Yadav said last week that wheat output in 2010-11 will likely exceed the government's estimate of 81.47 million tonnes. Some officials say it could be as high as 84 million tonnes, compounding storage worries.

 

Harvest of the new wheat crop in the northern grain bowl states of Punjab and Haryana has just started and is likely to peak between mid-April to end of the month. Wheat is sown in the winter months of October-November. Good rains as well as high state-fixed minimum prices of the wheat encouraged farmers to sow more of the staple.

 

"Storage will be a problem. The situation is likely to be broadly similar to last year's," said an official with Food Corp. of India, the government's main procurement agency.

 

State agencies in the northern states were forced to store sacks of grain in the open covered with plastic sheets after their warehouses ran out of space, with the government cornering a bulk of the wheat crop for its own stocks. Heavy post-harvest showers washed away some of the grain, sparking furious criticism in parliament.

 

The government plans to add space to store 15 million tonnes of grains in two years from the current capacity of around 42 million tonnes, and tenders have been finalized for about five million tonnes. However, food ministry officials say the capacity ramp up won't happen in a year. To cope with the expected jump in procurement this year, the government has decided to hire storage space from private parties.

 

The Food Corp. official, who is based out of Haryana, said that state officials plan to dispatch around a million tonnes of grain to other consuming states while procurement is underway, but even so it is expected that there will be a shortage of around one million tonnes of storage space.

 

"Some additional storage space has been created, but it won't be enough," the official said, adding that the total storage space available in the state is around 10 million tonnes.

 

Punjab also plans to dispatch 800,000-900,000 tonnes of wheat to consuming centers during procurement to ease the storage burden, he said.

 

A Food Corp. official based out of Punjab said the state has created storage space for around 11 million tonnes, including facilities for storing the grain in the open on plinths with sheets. But the state will still need additional space for 1.2-1.4 million tonnes of grains, the official said.