India Food Corp's wheat purchases show decrease
State-run Food Corporation of India's wheat purchases from farmers have fallen 2.3% from a year earlier between April 1 and May 9, as crop arrivals slowed in major producing states, according to a company executive.
The company has bought 21.04 million tonnes of wheat during the period, compared with 21.54 million tonnes a year earlier, the executive said on condition of anonymity. He did not say why arrivals have slowed.
Food Corp. plans to buy 26.3 million tonnes of wheat in the current crop year ending June 30, higher than last year's 25.4 million tonnes, as government officials expect a bumper crop of about 82 million tonnes in 2009-10, compared with 80.7 million tonnes a year earlier.
Food Corp. buys staple grains from farmers to build federal supplies, mainly to meet the requirements of welfare programmes and to ensure remunerative prices for farmers.
Each year, Food Corp. starts purchasing wheat April 1 and rice October 1.
Between October 1 and May 9, it bought 27.26 million tonnes of rice, 2.8% less than the 28.04 million tonnes it procured a year earlier, because of a smaller harvest following the drought in 2009, the executive said.
Continued grain buying after record purchases last year helped federal stocks swell to an all-time high of 59.93 million tonnes, more than thrice the government's requirement of 16.20 million tonnes for welfare programmes.
Large stocks have encouraged the government to sell more grains locally to control prices and create space in its almost-choked warehouses for new crops. Last week, it decided to sell 3.0 million tonnes of wheat and rice at cheap rates to low-income families.
"The government may also offload grains in the local markets for bulk users at subsidised rates," said Ajeet Kumar, analyst at SMC Global Securities.
"Moreover, it will likely review its decision to export wheat on a government-to-government basis," he said. "But a decision on export may come only after June when wheat purchases will be over."
