May 10, 2012

Indian wheat procurement makes grain supplies to record high

The grain stocks with the Food Corporation of India (FCI) and state government-owned procuring agencies have hit a record high of 71 million tonnes by early May, mainly credited to record rice and wheat procurement drive.

According to FCI data released on Monday (May 7), the country has a rice stock of nearly 33 million tonnes and wheat stocks over 30 million tonnes. Besides, nearly eight million tonnes wheat is lying at mandis in Punjab, Haryana, Madhya Pradesh and Uttar Pradesh as on May 1.

As on April 1, FCI and other state-owned agencies had grain (mostly rice and wheat) stock in excess of 53.3 million tonnes.

"Heavy procurement of wheat in last two weeks contributed to rise in grain stocks," an FCI official told FE. As per data, wheat procurement had crossed 23.7 million tonnes against around 20 million tonnes reported in the same period last year.

This is an increase of more than 18% over the last year figure. FCI officials say procurement would pick up momentum further in Punjab and Haryana in next one week.

Expecting a bumper wheat output, estimated at 90.2 million tonne, the government has set a record procurement target of 32 million tonnes against 28.33 million tonnes last year.

FCI had recently told the food ministry that huge stock of grain may get destroyed due to lack of storage capacity.

Even the opposition parties have criticised the government for sitting on huge grain stocks. They say such huge grain stocks can lead to acute storage crunch.

Finance minister Pranab Mukherjee said in Lok Sabha that besides providing tax and several other concessions to create more storage capacity, exports are being encouraged, and the rural development ministry is working on providing grain under National Rural Employment Guarantee Act (NREGA) workers as part of their wages.

FCI procures and distributes grain under the targeted public distribution system, and maintains buffer stocks and strategic reserves. Around two million tonnes of grain are distributed monthly in different states. It has a capacity of 61 million tonne, which includes 18 million tonnes of CAP (cover and plinth) capacity that can't keep the grains intact for more than a few weeks.