April 28, 2008

India to construct 5-million tonne grain storage facility

India announced plans to build grain reservoir with a capacity to store 5 million tonnes to address emergency situations, officials confirmed Friday.

The decision, according to industry observers, indicates that the government becomes deeply worried about the possibility of a grain shortage, especially during calamities.

The facility will be maintained by Food Corporation of India (FCI).  In size, it will almost be one-fifth of the highest buffer norm that is currently prescribed. For July 1, the foodgrain buffer norm stands at 26.9 million tonne.

Warehousing and storage capacity currently available with the Central Warehousing Corporation (CWC) and the State Warehousing Corporation (SWC) apart from the FCI and state agencies are likely to be used to store the strategic reserve.

Union food minister Sharad Pawar in the Rajya Sabha announced the plans on Friday as questions on foodgrain and food security were brought up.

Although food price hikes are expected to be moderate compared to the sharp jumps in 2007, food staple prices are not expected to calibrate to earlier levels anytime in the next six months.

While India five million tonnes of wheat in 2006 for the first time in several years, India was forced to buy high priced wheat to the tune of 1.8 million tonne to once again beef up the buffer stocks in 2007.