April 21, 2006

 

India's Apr 1-19 wheat purchases down two million tonnes on-year

 

 

The Indian federal government's wheat purchases from farmers Apr 1-19 were 6.2 million tonnes, down from 8.2 million tonnes a year earlier, latest government data showed Thursday (Apr 20).

 

Government's local wheat purchase is an indicator of the availability of crop on the market and the country's import needs in the next few months.

 

"Farmers seem to be holding back their production and arrivals have been lower this year resulting in less wheat landing in our kitty," said a government official.

 

He said the wheat procurement programme has made a slow start this year due to lower arrivals onto the local market.

 

Total market arrivals of wheat so far are estimated at 7.6 million tonnes, down from 8.7 million tonnes a year earlier.

 

While market arrivals have declined on the year by a little over 1 million tonnes, government's own purchases have fallen by 2.0 million tonnes.

 

In India, government purchases locally produced wheat at a set intervention price to ensure remunerative returns to the farmers.

 

However, the intervention price of Rp 650 per 100 kilogrammes is lower than the market rates, prompting farmers to delay sales in anticipation of higher prices at a later period.

 

Procurement in the northern state of Punjab, the largest contributor of wheat to the government's granaries, is now estimated at 4.3 million tonnes compared with 5.3 million tonnes a year earlier.

 

India's local wheat crop is harvested in April and May.

 

In February, India decided to import wheat for the first time in six years.

 

The country has contracted a purchase of 500,000 tonnes wheat from Australia's AWB Ltd and the first cargo is due to arrive in the country Sunday.

 

Last month, Food Minister Sharad Pawar said the country is considering importing another 1.5 million-2.0 million tonnes of wheat to build buffer stocks.