April 17, 2006

 

India halved wheat procurement

 

 

The Indian government's wheat purchases between late March and early April reached just 640,000 tonnes compared to 1.3 million tonnes a year ago, a senior government official said on Thursday (Apr 13). 

 

Procurement has been deterred by high prices in the open market which have surpassed the government's minimum support price of Rs 650/100 kg (US$14.4/ 100 kg), the official said. 

 

Wheat procurement in the north-western state of Punjab was 230,000 tonne in the first nine days of April, down 63.5 percent on-year.

 

However, wheat purchases are expected to intensify in the next one-two weeks in the state, where the government procures nearly 80 percent of its total stocks. 

 

The neighbouring state of Haryana also saw a decline, down 29 percent to 420,000 tonnes, the official said. 

 

The biggest decline was in the central Madhya Pradesh state where wheat procurement fell from 120,000 tonnes the same period last year to just 20 tonnes this year. Wheat prices in the state, were almost 20 percent higher than the government's procurement price.

 

Farmers in the state have not been selling wheat to the government despite a relaxation in requirements. Last month, the government relaxed quality requirements for wheat procurement in the state as the crop had suffered heavy qualitative damage due to unfavourable weather. 

 

Low wheat procurement is worrying as the country's buffer stocks, at 2.1 million tonnes, are only at half its normal levels, the official said. 

   

The government plans to buy 16.2 million tonnes in the current season, 70,000 tonnes below requirements for the public distribution system. Government estimates put India's wheat output in 2006 at 73 million tonnes, versus 72 million tonnes last year.