May 7, 2007

 

India prepares to buy wheat as shortfall expected

 

 

India is preparing to issue wheat tenders as this year's shortfall is expected at 2 million tonnes.

 

Still, this was slightly better than last year's figures, when the shortfall reached 5.5 million tonnes and sparked the biggest wheat import from India in years. 

 

As of May 2, Food Corporation of India, the government agency for procurement and distribution of foodgrains, has purchased more than 8.3 million tonnes of wheat from farmers

 

This was a 7.4-percent drop against the 8.91 million tonnes a year ago.

 

A total of 8.4 million tonnes of wheat has been procured till May 2, 2007, out of 10.7 million tonnes of arrival in the markets, an official said.

 

Punjab contributed most to the central pool with 5.55 million tonnes followed by Haryana at 2.57 million tonnes. The wheat procurement process starts from April 1 in most of the foodgrain growing states.

 

FCI and other state agencies were able to procure only 9.23 million tonnes last year against the targeted 16.2 million tonnes. This forced India to import 5.5 million tonnes of wheat to buffer existing stocks.

 

The government has set the wheat procurement target for this year at 15.1 million tonnes. However, this is likely to fall short by 2.0 million tonnes due to a slowdown in the procurement, officials said.

 

Wheat arrivals have fallen despite higher production this year as farmers are holding back on stocks, hoping to extract better price.

 

Expecting the shortfall, the State Trading Corporation has floated a global tender for one million tonnes of wheat on behalf of the government.

 

India's wheat production is expected at 73.7 million tonnes for 2006-07 against 69.35 million tonnes in the previous year.